CAF-5 · Chapter 8 · Question 6 of 10
Company XYZ produces two joint products, Alpha and Beta, from a single process. The total joint costs incurred are Rs. 300,000. The process yields 15,000 kg of Alpha and 10,000 kg of Beta. If joint costs are allocated based on physical output (weight), what amount of joint cost is allocated to Product Beta?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 120,000
Explanation
Total physical weight = 15,000 kg + 10,000 kg = 25,000 kg. Product Beta's share = 10,000 kg / 25,000 kg = 40%. Joint cost allocated to Beta = 40% × Rs. 300,000 = Rs. 120,000.
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