Amos, SA., manufactures products A and B from a joint process. Joint product costs were £40,000 during the month of October. Additional information is as follows: $\begin{array}{lrr}&&\text { Sales Value at }\\text { Product }&\text { Units Produced }&\text { Split-Off }\
\text { A } & 14,000 & £ 110,000 \
B & 6,000 & £ 90,000
\end{array}$ Amos uses the sales-value-at-split-off method of joint cost allocation. What is the amount of joint product costs to be allocated to products A and B in October, respectively?
A)£20,000; £20,000
B)£22,000; £18,000
C)£28,000; £12,000
D)£18,000; £22,000

Question

Quizplus · Accepted Answer

The sales value at split-off for product A is £110,000 and for product B is £90,000. The total sales value is £200,000. The joint cost allocation for product A is (£110,000/£200,000) * £40,000 = £22,000, and for product B is (£90,000/£200,000) * £40,000 = £18,000.

Amos, SA, Manufactures Products a and B from a Joint Process