Carey Ltd. manufactures Products X and Y from a joint process. Joint product costs were £60,000 during the month of December. Additional information is as follows: $\begin{array}{rrr}&&\text { Sales Value at }\\text { Product }&\text { Units Produced }&\text { Split-Off per Unit }\
X & 10,000 & £ 24 \
Y & 5,000 & £ 8
\end{array}$ What is the amount of joint product costs to be allocated to Product X during December using the sales-value-at-split-off method?
A)£20,000
B)£45,000
C)£51,429
D)£40,000

Question

Quizplus · Accepted Answer

The sales value of Product X at split-off is £240,000 (10,000 units x £24 per unit). The sales value of Product Y at split-off is £40,000 (5,000 units x £8 per unit). The total sales value at split-off is £280,000 (£240,000 + £40,000). The proportion of joint product costs to be allocated to Product X is £240,000 / £280,000 = 0.8571. Therefore, the amount of joint product costs to be allocated to Product X is £60,000 x 0.8571 = £51,429.

Carey Ltd Manufactures Products X and Y from a Joint Process