CAF-5 · Chapter 8 · Question 9 of 10
A process produces three joint products. Product M has a sales value at the split-off point of Rs. 400,000, Product N has a sales value of Rs. 500,000, and Product O has a sales value of Rs. 100,000. Total joint costs are Rs. 600,000. Using the sales value at split-off method, how much joint cost is allocated to Product M?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 240,000
Explanation
Total Sales Value at split-off = 400,000 + 500,000 + 100,000 = Rs. 1,000,000. Product M's proportion = 400,000 / 1,000,000 = 40%. Joint cost allocated to M = 40% × Rs. 600,000 = Rs. 240,000.
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