Question

Case 3 Gold Dates Enterprises is a company processing raw dates into three (3) different types of Dates namely; Barhi, Dayri and Thoory. During the month of April 2019, the joint costs of 2 processing dates were AED 78,500 There were no beginning and ending of the inventory for the period. Productions costs and Sales value details are as follows: Additional processing cost, Selling price at the end of in total (AED) the process, in total (AED) Unit produced Product 12,700 41,000 6,500 Barhi 102,000 42,200 17,500 Dayri 175,000 65,200 31,000 Thoory Required (Round to two decimal points, if needed): (10 marks) A. Compute the cost per unit for Barhi, Dayri and Thoory, if the estimated Net Realizable Value method is used. B. Compute the cost per unit for all three products if the Physical Quantity Method is Used

Answer 1

A.

	Barhi	Dayri	Thoory
Selling Price	$          41,000	$       1,02,000	$        1,75,000
Less : Additional Processing Cost	$          12,700	$          42,200	$           65,200
Net Realizable Value	$          28,300	$          59,800	$        1,09,800	$     1,97,900
Allocation of Joint Costs	$          11,226	$          23,721	$           43,554
Additional Processing Cost	$          12,700	$          42,200	$           65,200
Total Cost	$          23,926	$          65,921	$        1,08,754
Units	6500	17500	31000
Cost per unit	$              3.68	$               3.77	$                3.51

Allocation of Joint Costs = Total Joint Cost / Total Net Realizable Value x Net Realizable value of product.

B.

	Barhi	Dayri	Thoory
Allocation of Joint Costs	$            9,277	$          24,977	$           44,245
Additional Processing Cost	$          12,700	$          42,200	$           65,200
Total Cost	$          21,977	$          67,177	$        1,09,451
Units	6500	17500	31000	55000
Cost per unit	$              3.38	$               3.84	$                3.53

Allocation of Joint Costs = Total Joint Cost / Total Quantity x Quantity of product.