COSTING BY-PRODUCTS AND JOINT PRODUCTS value produced simultaneously with a product o is usually produced in greater quantities than of processes, with each product possessing more than in which its produced. The production is simultaneou process inevitably creates all of the products. as separable, individual units. Before that point, t whole. condition at split off point: 1) those sold in their original form without need of 2) those that require further processing to be salab manufacturing of products produced from the same pro or more different joint or by-products are created f a joint cost results. A joint cost is incurred prior identifiable with the individual product and, genera By-product is generally used to denote a produ The product with the greater value, commonly c Joint products are produced simultaneously by a comm The split-off point is defined as the point at which By products can be classified into two groups accord Joint Costs can be defined as the cost that arises f The total production cost of multiple products invol separate, individual product costs. These separable
Transcript
COSTING BY-PRODUCTS AND JOINT PRODUCTS
value produced simultaneously with a product of greater total value.
is usually produced in greater quantities than the by-product.
of processes, with each product possessing more than nominal value in the form in which its produced. The production is simultaneous because the manufacturingprocess inevitably creates all of the products.
as separable, individual units. Before that point, the products form a homogeneous whole.
condition at split off point:1) those sold in their original form without need of further processing2) those that require further processing to be salable
manufacturing of products produced from the same process. Whenever twoor more different joint or by-products are created from a single resourcesa joint cost results. A joint cost is incurred prior to the split-off point.
identifiable with the individual product and, generally, need no allocation.
By-product is generally used to denote a product relatively small total
The product with the greater value, commonly called the main product,
Joint products are produced simultaneously by a common process or serries
The split-off point is defined as the point at which these several products emerge
By products can be classified into two groups according to their marketable
Joint Costs can be defined as the cost that arises from the simultaneous
The total production cost of multiple products involve both joint costs andseparate, individual product costs. These separable product costs are
value produced simultaneously with a product of greater total value.
is usually produced in greater quantities than the by-product.
of processes, with each product possessing more than nominal value in the form in which its produced. The production is simultaneous because the manufacturing
as separable, individual units. Before that point, the products form a homogeneous
1) those sold in their original form without need of further processing
manufacturing of products produced from the same process. Whenever twoor more different joint or by-products are created from a single resourcesa joint cost results. A joint cost is incurred prior to the split-off point.
identifiable with the individual product and, generally, need no allocation.
is generally used to denote a product relatively small total
The product with the greater value, commonly called the main product,
are produced simultaneously by a common process or serries
is defined as the point at which these several products emerge
can be classified into two groups according to their marketable
can be defined as the cost that arises from the simultaneous
of multiple products involve both joint costs andseparable product costs are
METHOD OF COSTING BY-PRODUCTS
Method 1, gross revenue from sales of the by-products is presented on
the income statement as any one of the following:
a) Other income
b) Additional sales revenue
c) A deduction from the cost of good sold of the main product
d) A deduction from the total production cost of the main product
Sales (main product, 10,000 unit @ $2)
Cost of Goods Sold:
Beginning inventory (1,000 unit @ $1.50)
Total production cost ( 11,000 unit @ $ 1.50)
Cost of goods available for sale
Ending inventory (2,000 unit @ $ 1.50)
Gross Profit
Marketing and Administrative Expenses
Operating Income
Other income: Revenue from sales of by-product
Income before income tax
Method 1b: By-product revenue as additional sales revenue
Method 1c: By product revenue as a deduction from the cost of goods sold
Method 1d: By-product revenue as a deduction from production cost
Sales (main product, 10,000 unit @ $2)
Method 1a) By-product revenue as Other Income
Cost of Goods Sold:
Beginning inventory (1,000 unit @ $1.35)
Total production cost ( 11,000 unit @ $ 1.50)
Revenue from sales of by-product
Net production cost
Cost of goods available for sale (12.000 unit @ $ 1.3625)
Ending inventory (2,000 unit @ $ 1.3625)
Gross Profit
Marketing and Administrative Expenses
Operating Income
Method 2; Recognition of Net Revenue
Net revenue recognize the need for assigning traceable costs to the by-product
It does not attempt, however, to allocate any joint production cost to the by-product.
The costs incurred after the split-off point to process or market the by-product
are recorded in account separate from those for the main products.
By-product figures are shown on the income statement using one of the four of
method 1.
Method 3: Replacement Cost Method
Ordinarily is used by companies whose by-products are used somewhere
within the same company. The existence of the by-product removes the
necessity of purchasing equivalent materials from suppliers.
Method 4: Market Value (Reversal Cost) Method
is basically similar to the technique illustrated in method 1d. However, it reduced
the manufacturing cost of the main product, not by the actual revenue received, but
by an estimate of the by-product's value at the time of recovery.
METHODS OF ALLOCATING JOINT PRODUCT COST TO JOINT PRODUCTS
Joint production cost (incurred before split-off), can be allocated to joint products
under one of the following methods:
1) The Market Value method, based on the relative market values of the individual
product
2) The average unit cost method
3) The weighted average method, based on predetermined weighting factors
4) The quantitative unit method, based on some physical measurement unit
such as weight, linear measure, or volume.
Method 1, gross revenue from sales of the by-products is presented on
c) A deduction from the cost of good sold of the main product
d) A deduction from the total production cost of the main product
$ 20,000
$ 1,500
$ 16,500
$ 18,000
$ 3,000 $ 15,000
$ 5,000
$ 2,000
$ 3,000
$ 1,500
$ 4,500
Method 1b: By-product revenue as additional sales revenue
Method 1c: By product revenue as a deduction from the cost of goods sold
Method 1d: By-product revenue as a deduction from production cost
$ 20,000
$ 1,350
$ 16,500
$ 1,500
$ 15,000
Cost of goods available for sale (12.000 unit @ $ 1.3625) $ 16,350
$ 2,725 $ 13,625
$ 6,375
$ 2,000
$ 4,375
Net revenue recognize the need for assigning traceable costs to the by-product
It does not attempt, however, to allocate any joint production cost to the by-product.
The costs incurred after the split-off point to process or market the by-product
are recorded in account separate from those for the main products.
By-product figures are shown on the income statement using one of the four of
Ordinarily is used by companies whose by-products are used somewhere
within the same company. The existence of the by-product removes the
necessity of purchasing equivalent materials from suppliers.
is basically similar to the technique illustrated in method 1d. However, it reduced
the manufacturing cost of the main product, not by the actual revenue received, but
by an estimate of the by-product's value at the time of recovery.
METHODS OF ALLOCATING JOINT PRODUCT COST TO JOINT PRODUCTS
Joint production cost (incurred before split-off), can be allocated to joint products
1) The Market Value method, based on the relative market values of the individual
3) The weighted average method, based on predetermined weighting factors
4) The quantitative unit method, based on some physical measurement unit
MARKET VALUE METHOD
Joint Product salable at Split-off
PRODUCT Unit Produced
A 20,000 $ 0.25 $ 5,000
B 15,000 $ 3.00 $ 45,000
C 10,000 $ 3.50 $ 35,000
D 15,000 $ 5.00 $ 75,000
TOTAL $ 160,000
Under the market value method, each joint product yields the same gross profit percentage,
asumming the units are sold without further processing. This can be illustrated as follows,
assuming no beginning inventories:
Total A B
Sales - unit 52,000 18,000 12,000
Ending Inventories 8,000 2,000 3,000
Sales - dollars $ 138,500 $ 4,500 $ 36,000
Production cost $ 120,000 $ 3,750 $ 33,750
Less ending invent. $ 16,125 $ 375 $ 6,750
Cost of Goods sold $ 103,875 $ 3,375 $ 27,000
Gross Profit $ 34,625 $ 1,125 $ 9,000
% of Gross Profit 25.0% 25.0% 25.0%
Market Value per unit at Split-off
Total Market Value
Total A B
Sales - unit 52,000 18,000 12,000
Harga jual $ 0.25 $ 3.00
138,500 $ 4,500 $ 36,000
Production cost $ 120,000 $ 3,750 $ 33,750
Cost per unit $ 0.19 $ 2.25
Ending Inventories 8,000 2,000 3,000
Ending Inventories ($) $ 16,125 $ 375 $ 6,750
COGS $ 103,875 $ 3,375 $ 27,000
Gross Profit $ 34,625 $ 1,125 $ 9,000
% of Gross Profit 25.0% 25.0% 25.0%
3.125% $ 3,750
28.125% $ 33,750
21.875% $ 26,250
46.875% $ 56,250
100.0% $ 120,000
Under the market value method, each joint product yields the same gross profit percentage,
asumming the units are sold without further processing. This can be illustrated as follows,
C D
8,000 14,000
2,000 1,000
$ 28,000 $ 70,000
$ 26,250 $ 56,250
$ 5,250 $ 3,750
$ 21,000 $ 52,500
$ 7,000 $ 17,500
25.0% 25.0%
Ratio of Product Value
to Total Market Value
Apportionment of Joint
Production Cost
C D
8,000 14,000
$ 3.50 $ 5.00
$ 28,000 $ 70,000
$ 26,250 $ 56,250
$ 2.63 $ 3.75
2,000 1,000
$ 5,250 $ 3,750
$ 21,000 $ 52,500
$ 7,000 $ 17,500
25.0% 25.0%
Joint Product Not salable at split-off
PRODUCT
A $ 0.50 $ 2,000 B $ 5.00 $ 10,000 C $ 4.50 $ 10,000 D $ 8.00 $ 28,000
PRODUCT
A $ 0.50 20,000 B $ 5.00 15,000 C $ 4.50 10,000 D $ 8.00 15,000
Total
Total ASales - unit 52,000 18,000 Ending Inventories 8,000 2,000
Sales - dollars $ 217,000 $ 9,000 Production cost $ 120,000 $ 4,800 Further Processing Cost $ 50,000 $ 2,000
Ultimate Market Value
per unit
Subsequent Processing Cost (after
split-off)
Ultimate Market Value
per unit
Unit Produced
Total $ 170,000 $ 6,800 Less ending invent. $ 22,227 $ 680 Cost of Goods sold $ 147,773 $ 6,120 Gross Profit $ 69,227 $ 2,880 % of Gross Profit 31.9% 32.0%
Total AUltimate sales value $ 250,000 $ 10,000 Less 32% Gross Profit $ 80,000 $ 3,200 Total Cost $ 170,000 $ 6,800 Further processing cost $ 50,000 $ 2,000 Joint Cost $ 120,000 $ 4,800
Selama bulan Juli 2006 Joint processing cost adalah sebesar RpRincian tentang ke tiga jenis produk adalah sebagai berikut:
ProdukA
Produksi dalam unit 1,000 Unit yang dijual 800 Biaya proses lanjut Rp225,000,000Harga Jual per unit Rp900,000
Diminta:1). Hitung biaya produksi per unit dan total yang dibebankan pada persediaan akhir masing-masing produk, menggunakan metode alokasi joint cost ke produk berdasar
(tanpa diproses lanjut) dengan harga sebagai berikut :Produk A = Rp540,000Produk B = Rp585,000Produk C = Rp225,000
tersebut di atas ?
3) Apakah jawab untuk produk B pada soal 2) berubah, jika biaya proses lanjut sebesar
B sebesar = Rp 162,000,000 Buat jawaban saudara disertai perhitungan yang jelas!
PT EGP & Co memproduksi 3 jenis produk A, B dan C, sebagai hasil dari joint process
market value method ( Persediaan barang jadi per 1 Juli 2006 tidak ada / nol)
2). Konsumen ingin membeli semua output masing-masing produk setelah split off point
Produk yang mana yang disetujui dapat dijual setelah split off point dengan harga
Rp 540.000.000 tersebut termasuk di dalamnya fixed cost
E8-6 Joint Cost = $ 288,000 A
1 Unit Produced 1,000 unit dijual 800
2 Separable process costs $ 25,000 3 Unit Sales price $ 100.00
4 Market Value (1x3) $ 100,000 5 Separable process costs $ 25,000 6 Hypotethical Value (4-5) $ 75,000 7 Percentage from total 18.8%8 Joint Cost allocation $ 54,000
CostJoint Cost $ 54,000 Bi Proses lanjut $ 25,000 Total Cost $ 79,000
Produksi 1,000
1) Cost / unit $ 79.00
Nilai Persediaan total $15,800
2) Harga Konsumen $ 60.00 Joint Cost per unit $ 54.00 Margin at split off point $ 6.00
Harga Jual $ 100.00 Cost per unit $ 79.00 Margin stlh proses lanjut $ 21.00
3)
Fixed cost per unit prod B = $18,000
Harga Jual $80Relevant Cost $ 57 Margin = $23
Selama bulan Juli 2006 Joint processing cost adalah sebesar Rp 2,592,000,000 Rincian tentang ke tiga jenis produk adalah sebagai berikut:
ProdukB C
3,000 5,000 2,500 4,300
Rp540,000,000 Rp945,000,000Rp720,000 Rp450,000
1). Hitung biaya produksi per unit dan total yang dibebankan pada persediaan akhir masing-masing produk, menggunakan metode alokasi joint cost ke produk berdasar
(tanpa diproses lanjut) dengan harga sebagai berikut :
3) Apakah jawab untuk produk B pada soal 2) berubah, jika biaya proses lanjut sebesar
Buat jawaban saudara disertai perhitungan yang jelas!
PT EGP & Co memproduksi 3 jenis produk A, B dan C, sebagai hasil dari joint process
( Persediaan barang jadi per 1 Juli 2006 tidak ada / nol)
2). Konsumen ingin membeli semua output masing-masing produk setelah split off point
Produk yang mana yang disetujui dapat dijual setelah split off point dengan harga
Rp 540.000.000 tersebut termasuk di dalamnya fixed cost yang dialokasikan ke produk
Sales $ 75,000 $ 6,000 $ 3,500 Bi Prod setelah split off $ 11,500 $ 1,100 $ 900 Bi Pemasrn & Adm $ 6,000 $ 750 $ 550
Biaya prd sebelum split off( Joint Cost )
By ProductA B
Profit utk by product 15% 12% $ 900 $ 420
Bi Prod setelah split off $ 1,100 $ 900 Bi Pemasrn & Adm $ 750 $ 550 Total bi + keunt A dan B $ 2,750 $ 1,870 Beban joint cost utk A dan B $ 3,250 $ 1,630 Beban Joint Cost utk Main P
Income StatementMain Product A B
Sales $ 75,000 $ 6,000 $ 3,500 Product Cost:Bi sebelum split off $ 32,620 $ 3,250 $ 1,630
Bi prod setelah split off $ 11,500 $ 1,100 $ 900
Total Bi Produksi $ 44,120 $ 4,350 $ 2,530 Laba Kotor $ 30,880 $ 1,650 $ 970 Bi Pemasarn & Adm $ 6,000 $ 750 $ 550 Laba Bersih sblm pjk $ 24,880 $ 900 $ 420
15.0% 12.0%
Total $ 84,500 $ 13,500 $ 7,300
$ 37,500
$ 4,880 $ 32,620
Total $ 84,500
$ 37,500
$ 13,500
$ 51,000 $ 33,500 $ 7,300 $ 26,200
Biaya Bahan Baku Y = 6,000 Biaya TKL Y = 4,000 Bi Overhead Pbrk Y = 23,650,000 + 3,750
Total Bi Produksi Y = 23,650,000 + 13,750
Kap Normal = 10.000 unitProduksi 11,000 unit Harga Jual Rp 25,000 Bi Umum & Adm = Rp 18,500,000
a) Biaya Var per unit = Rp 13,750
b) Biaya Konversi per unit = Bi TKL / unit + BOP / unit
c) Biaya primer / utama per unit = Bi Bhn Bk / unit + Bi TKL / unit
6,000 + 4,000
d) Bi Produksi per unit = 174,900,000 15,900 11,000
Pers Awal 1,000 Produksi 11,000 Jumlah 12,000 Penjualan 9,500 Pers Akhir 2,500 x 15,900
Sales 9,500 x 25,000 Cost 9,500 x 15,900 Laba KotorBi Umum & AdmLaba Operasi
