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- 20 Marks
IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis
Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd
Question
a) Distinguish between joint product and by-product. (5 marks)
b) Odotobiri Ltd produces joint products (X, Y) from an identical manufacturing process. In December 2023, 11,000kg of materials were put into the production process. The total costs of processing (direct materials and conversion costs) were GH¢100,000. Output was 6,000 units of product X and 4,000 units of product Y and 1,000 units of a by-product Q. X has a sales value of GH¢24 per unit and Y has sales value of GH¢12 per unit. By-product Q has a sales value of GH¢1 per unit. The company has a policy to apportion joint costs based on sales value at a split-off point. 80% of the output of both X and Y was sold by the month-end.
Required:
i) Extract the Process Account. (6 marks)
ii) Prepare the Income Statement. (4 marks)
c) Controlling through standards and standard costing is a creative technique for company
managers to determine whether the organisation’s resources are being used effectively.
Standard costs are typically determined during budgetary control process because they
employ predetermined standard cost for direct material, direct labour, and factory overhead.
Required:
Explain FOUR (4) uses of standard costing.
Find Related Questions by Tags, levels, etc.
- Tags: By-Products, Income Statement, Joint Products, Process Account, Standard Costing
- Level: Level 1
- Topic: Standard Costing and Variance Analysis
- Series: MAR 2024
- 20 Marks
IMAC – MAR 2024 – L1 – Q4 – Standard Costing and Variance Analysis
Distinguish between joint products and by-products, prepare a process account and income statement for Odotobiri Ltd
Question
a) Distinguish between joint product and by-product. (5 marks)
b) Odotobiri Ltd produces joint products (X, Y) from an identical manufacturing process. In December 2023, 11,000kg of materials were put into the production process. The total costs of processing (direct materials and conversion costs) were GH¢100,000. Output was 6,000 units of product X and 4,000 units of product Y and 1,000 units of a by-product Q. X has a sales value of GH¢24 per unit and Y has sales value of GH¢12 per unit. By-product Q has a sales value of GH¢1 per unit. The company has a policy to apportion joint costs based on sales value at a split-off point. 80% of the output of both X and Y was sold by the month-end.
Required:
i) Extract the Process Account. (6 marks)
ii) Prepare the Income Statement. (4 marks)
c) Controlling through standards and standard costing is a creative technique for company
managers to determine whether the organisation’s resources are being used effectively.
Standard costs are typically determined during budgetary control process because they
employ predetermined standard cost for direct material, direct labour, and factory overhead.
Required:
Explain FOUR (4) uses of standard costing.
Find Related Questions by Tags, levels, etc.
- Tags: By-Products, Income Statement, Joint Products, Process Account, Standard Costing
- Level: Level 1
- Topic: Standard Costing and Variance Analysis
- Series: MAR 2024