Page 13 - 7. COMPILER QB - INDAS 2
P. 13

1.  Calculation of NRV of By-product BP
                 Selling price of by-product                     8,000 units x 10 per unit    80,000

                 Less: Separate processing charges of by-product BP                           (32,000)
                 Packing charges                                                              (8,000)
                 Net realizable value of by-product BP                                        40,000


            2.  Calculation of cost of conversion for allocation between joint products MP1 and MP2
                 Raw material                                                            6,00,000

                 Wages                                                                   3,60,000
                 Fixed overhead                                                          2,60,000
                 Variable overhead                                                       2,00,000
                 Less: NRV of by-product BP (See calculation 1)        40,000

                 Sale value of scrap                                   20,000            (60,000)
                                                                                         13,60,000


            3.  Determination of “basis for allocation” and allocation of joint cost to MP1 and MP2
                                                                             MP 1              MP 2
                 Output in units (a)                                        20,000            16,000

                 Sales price per unit (b)                                     45               37.50
                 Sales value (a x b)                                        9,00,000         6,00,000

                 Ratio of allocation                                           3                2
                 Joint cost of Rs 13,60,000 allocated in the ratio of 3:2 (c)   8,16,000     5,44,000
                 Cost per unit [c/a]                                         40.80              34


            4.  Determination of value of the closing stock of MP1 and MP2
                 Particulars                                                 MP 1              MP 2
                 Closing stock in units                                      1,000             400

                 Cost per unit                                               40.80              34
                 Value of closing stock                                     40,800            13,600























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