Assume the total manufacturing costs are $9000 and that two products result.Information about these two products is: $$\begin{array} { c c c }
\text { Product } & \text { Quantity } & \text { Net sales value } \
\text { A } & 6000 & \$ 7000 \
\mathrm {~B} & 4000 & 3000
\end{array}$$ For inventory costing purposes what is the amount of joint costs that should be assigned to Product A on a per unit basis?

Question

Assume the total manufacturing costs are $9000 and that two products result.Information about these two products is: $$\begin{array} { c c c } 
\text { Product } & \text { Quantity } & \text { Net sales value } \
\text { A } & 6000 & \$ 7000 \
\mathrm {~B} & 4000 & 3000
\end{array}$$ For inventory costing purposes what is the amount of joint costs that should be assigned to Product A on a per unit basis?

Quizplus · Accepted Answer

The joint costs are allocated based on the net sales value. Product A's net sales value is $7000, and the total net sales value is $10000 ($7000 + $3000). The proportion of joint costs allocated to Product A is $7000/$10000 = 0.7. Therefore, the joint cost assigned to Product A is 0.7 * $9000 = $6300. On a per unit basis, this is $6300/6000 units = $1.05.

Assume the Total Manufacturing Costs Are $9000 and That Two