Imperial Mining is a coal company that produces three grades of coal-High, Medium, and Low-in fixed...

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Imperial Mining is a coal company that produces three grades of coal-High, Medium, and Low-in fixed proportions. The joint co

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Answer 1

Answer #1

physical quantities method

	High Grade	Medium Grade	Low Grade	Total
Quantity	20400	30600	10200	61200
price/ton	60	40	10
NRV	1224000[20400*60]	1224000[30600*40]	102000[10200*10]	2550000
allocated joint cost	575000[(1,725,000/61200)*20400]	862500[(1725000/61200)*30600)]	287500 [1725000/61200)*10200]	1725000
product profit loss	649000 [1224000-575000]	361500 [1224000-862500]	-185500 [102000-287500]	825000

joint cost is allocated on the basis of production quantity ratio of product.

2.NRV

	High Grade	Medium Grade	Low Grade	Total
Quantity	20400	30600	10200	61200
price/ton	60	40	10
NRV	1224000[20400*60]	1224000[30600*40]	102000[10200*10]	2550000
allocated joint cost	828000[(1,725,000/2550000)*1224000]	828000[(1725000/2550000)*1224000)]	69000[1725000/2550000)*102000]	1725000
product profit loss	396000 [1224000-828000]	396000[1224000-828000]	33000 [102000-69000]	825000

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Answer 2

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