Вы находитесь на странице: 1из 2

Joint Product and By Product

Joint Product By Product Co Product

Two or more products, Two or more products, Two or more products,

Produced from the same Produced from the same Belonging to the same line of activity, but
process or operation process or operation arising from different process or operation.
Considered to be of Considered to be of Considered to be of relatively equal
relatively equal importance. relatively less importance. importance.

E.g. In refining crude oil. E.g. Molasses arising in the E.g. Rice & Wheat are agriculture produced,
manufacture of sugar. but they arise from different process.

Method of apportioned of joint cost:

1. Physical quantities method,

2. Average unit cost method,
3. Survey/ Technical evaluation/ Point method,
4. Contribution margin method,
5. Market value method a. M.V. at Split off point,
b. M.V. after further processing,
c. Net realizable value after split off point
6. Constant Gross Margin Percentage method

1|Page Costing #NS

Joint Product and By Product

Formulas: Apportioned of joint cost

1. By Physical quantities method * 2. By Sales value method

Total Joint Cost X Physical units Total Joint Cost X Sales revenue of each
Total Physical Units of each product Total Sales value product

3. By MV at split-off pint method 4. By MV after processing method

Total Joint Cost X MV at SOP of Total Joint Cost X MV after processing of
Total MV at SOP each product Total MV each product

5. By Net realizable method 6. Contribution Margin method#

Total Joint Cost X NRV of each Marginal Cost By Physical or Avg. Methd
Total NRV product Fixed Cost On the basis of contribution

Statement of profit Net realizable value

Particular Amt. Amt. Particular Amt. Amt.
Joint Cost XX
Further Cost XX XX Sales XX
Factory Cost XX Less :
Add : Office Overheads XX XX Estimated profit (XX)
Cost of Production XX S & D Exp. (XX)
Add : Opening Stock of FG XX Post split off cost (XX) (XX)
Less : Closing Stock of FG (XX) XX
Cost of Goods Sold XX Net Real. Value XX
Add : Selling & Dist. Overheads XX XX
Cost of Sales XX
Add : Profit XX
Sales XX

Important Note:
1. For apportionment of joint cost actual sales is not necessary, joint cost will be apportioned over
the total i.e. expected sales.
2. Closing stock of FG valued at CPU of cost of production.
3. In absence of information about apportionment of joint cost, then use MV at split off point
method. (If information about MV at SOP is given).
4. If MV at SOP is not given then follow Estimated joint cost margin method.
5. *Any loss arising during the stage of processing is also apportioned over the products on the
same basis.
6. # Total joint cost is apportioned.

2|Page Costing #NS