Process Costing

Question 1

How is the unit cost for joint product when the common costs is apportioned by physical measurement

Answer 1

Have an equal unit cost at the separation point

Question 2

What happens when we apportion common costs using market/sales value

Answer 2

All joint products will have the same gross profit percentage margin at the split-off point.

Question 3

Formula to calculate NRV for by-product

Answer 3

= Final sales value - Further processing cost

Question 4

Is common cost relevant in further processing decision ?

Answer 4

NO

Question 5

Is by-product a waste product

Answer 5

NO

By-product has a low value, but they still has a value and not a waste product