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COSTING BY-PRODUCTS AND JOINT PRODUCTS By-product is generally used to denote a product relatively small total value produced

simultaneously with a product of greater total value. The product with the greater value, commonly called the main product, is usually produced in greater quantities than the by-product.
Joint products are produced simultaneously by a common process or serries of processes, with each product possessing more than nominal value in the form in which its produced. The production is simultaneous because the manufacturing process inevitably creates all of the products. The split-off point is defined as the point at which these several products emerge as separable, individual units. Before that point, the products form a homogeneous whole. By products can be classified into two groups according to their marketable condition at split off point: 1) those sold in their original form without need of further processing 2) those that require further processing to be salable Joint Costs can be defined as the cost that arises from the simultaneous manufacturing of products produced from the same process. Whenever two or more different joint or by-products are created from a single resources a joint cost results. A joint cost is incurred prior to the split-off point. The total production cost of multiple products involve both joint costs and separate, individual product costs. These separable product costs are identifiable with the individual product and, generally, need no allocation.

t relatively small total greater total value. lled the main product, by-product.

mon process or serries nominal value in the form ecause the manufacturing

e several products emerge ducts form a homogeneous

g to their marketable

r processing

the simultaneous cess. Whenever two single resources lit-off point.

both joint costs and oduct costs are ed no allocation.

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 Method 1a) By-product revenue as Other Income 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

35) Total production cost ( 11.500 $1. By-product figures are shown on the income statement using one of the four of method 1.000 unit @ $ 1.000 unit @ $ 1.Method 1d: By-product revenue as a deduction from production cost Sales (main product.3625) Gross Profit Marketing and Administrative Expenses Operating Income $16. Method 3: Replacement Cost Method Ordinarily is used by companies whose by-products are used somewhere within the same company.500 Method 2.000 unit @ $1.000 unit @ $ 1.50) Revenue from sales of by-product Net production cost Cost of goods available for sale (12. It does not attempt. Recognition of Net Revenue Net revenue recognize the need for assigning traceable costs 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. The existence of the by-product removes the necessity of purchasing equivalent materials from suppliers. to allocate any joint production cost to the by-produc . however.000 unit @ $2) Cost of Goods Sold: Beginning inventory (1. 10.3625) Ending inventory (2.

the manufacturing cost of the main product. based on the relative market values of the individual . or volume. 1) The Market Value method. linear measure.Method 4: Market Value (Reversal Cost) Method is basically similar to the technique illustrated in method 1d. However. based on predetermined weighting factors 4) The quantitative unit method. it reduced by an estimate of the by-product's value at the time of recovery. not by the actual revenue received. bu 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: product 2) The average unit cost method 3) The weighted average method. based on some physical measurement unit such as weight.

000 $5.000 $1.000 $2.000 $15.000 $3.000 $3.000 $1.500 $18.500 of goods sold .sented on $20.500 $16.500 $4.

000 $1.375 $2.375 to the by-product cost to the by-product.725 $13.$20.625 $6.000 $4.000 $16.350 $15.350 $2. t the by-product one of the four of somewhere moves the .

owever. but OINT PRODUCTS ed to joint products lues of the individual eighting factors asurement unit . it reduced revenue received.

000 15.000 $0.875 $34.000 PRODUCT A B C D TOTAL Under the market value method.625 25.000 $16.000 $33.000 $4.000 8.125 $103.000 $9. each joint product yields the same gross profit pe assuming no beginning inventories: Total Sales .125 25.000 $36.000 $45.000 10.000 $138.unit Ending Inventories Sales .0% asumming the units are sold without further processing.000 15.375 $1.500 $120.750 $375 $3.0% A 18. Cost of Goods sold Gross Profit % of Gross Profit 52.0% B 12.00 $3.750 $27.000 3.000 $35.MARKET VALUE METHOD Joint Product salable at Split-off Market Value Total Market Unit Produced per unit at Value Split-off 20.000 $75.500 $3.750 $6.50 $5.000 2.25 $3.00 $5.000 $160.dollars Production cost Less ending invent. This can be illustrated as f .000 25.

875 $34.000 $0.125 $103.00 $36.125 25.25 3.25 $4.750 $27.000 $3.unit Harga jual 138.000 52.000 $6.375 $1.000 $16.Total Sales .0% .0% $120.000 $33.750 $0.0% B 12.000 $9.000 A 18.500 Production cost Cost per unit Ending Inventories Ending Inventories ($) COGS Gross Profit % of Gross Profit 8.19 2.750 $2.000 25.500 $3.000 $375 $3.625 25.

875% 46.Ratio of Apportionment Product Value of Joint to Total Production Cost Market Value 3.000 $56.0% D 14.125% 21.000 1.250 $120.750 $33.500 25.750 $26.000 $7.250 $5.125% 28.000 $26.750 $52.0% .875% 100.500 $17.0% $3.250 $56.000 2. can be illustrated as follows.000 25.250 $3.000 e same gross profit percentage. C 8.000 $28.000 $70.250 $21.

250 $21.250 $3.500 $17.000 $3.000 $26.C 8.0% D 14.750 $52.75 1.00 $70.0% .000 $7.000 $5.000 25.50 $28.000 $56.000 $5.63 2.500 25.000 $3.250 $2.

000 $217.dollars Total 52.000 $250.50 $5.000 10.50 $8.00 $4.000 $45.50 $5.000 15.000 $120.000 $60.000 8.000 15.000 Ultimate Market Value $10.Joint Product Not salable at split-off PRODUCT A B C D Subsequent Ultimate Processing Market Value Cost (after per unit split-off) $0.00 $2.000 $75.000 .00 Unit Produced 20.000 PRODUCT A B C D Total Ultimate Market Value per unit $0.000 $10.50 $8.000 $10.000 2.000 A 18.000 3.000 Sales .unit Ending Inventories Sales .00 $4.000 $28.000 $9.000 B 12.

000 AVERAGE UNIT COST METHOD Total Joint Production Cost The number of units produced $120.7% Ultimate sales value Less 32% Gross Profit Total Cost Further processing cost Joint Cost Total $250.800 34.000 60.000 $41.000 $50.000 $22.000 $3.000 $170. Cost of Goods sold Gross Profit % of Gross Profit $120.000 $6.200 $6.000 $170.000 $4.000 10.000 $24.9% $4.120 $2.200 $20.800 $39.000 $80.000 Apportionme nt of Joint Cost $40.000 A B C .227 $147.000 $20.800 $2.800 $680 $6.000 = PRODUCT Unit Produced 20.880 32.Production cost Further Processing Cost Total Less ending invent.0% $39.000 A $10.000 $9.000 $51.227 31.800 $2.000 $10.000 15.000 $120.773 $69.000 $10.000 $30.000 $49.000 $50.800 B $75.

000 60.000 10.5 15.000 60.000 $120.000 WEIGHTED AVERAGE METHOD Product A Product B Product C Product D - 3 points 12 points 13.000 600.000 $30.000 15.000 180.000 225.0 12.5 points 15 points PRODUCT Unit Produced 20.0 Total Joint Production Cost Total number of weighted units = $120.000 135.D 15.000 .000 A B C D 3.000 15.000 Points Weighted Units 60.000 600.0 13.

0% $4.800 $49.000 $10.000 $36.3% 68.000 $35.000 $55.800 $39.000 $31.200 Processing Apportionment Total Hypothetical Cost (after of Joint Production Market Value split-off) Production Cost Cost $2.000 $6.3% 68.000 Total Production Cost Percentage 68.000 $10.000 $21.0% 32.0% 65.000 $112.000 $92.200 $120.000 .000 $50.000 $83.5% 46.000 $4.000 $200.000 $21.000 $8.0% C 8.9% 69.000 1.4.000 2.800 $39.000 $65.5% 17.000 $55.000 $28.200 $170.000 D 14.

200 $24.000 $14.800 $11.000 $53.400 $30.200 31.200 $28.653 $34.600 D $120.000 $38.000 $6.200 $5.7% C $45.000 $10.400 $81.547 $77.600 $28.000 $31.1% $55.600 0 = $2 / unit .600 $10.$21.000 $20.347 30.000 $83.

20 = $0.000 $27.000 $36.20 $0.000 $0.20 per unit .20 $0.000 $120.20 $0.000 $45.Cost per Unit Apportionmen t of Joint Cost $12.

000 tersebut termasuk di dalamnya fixed cost B sebesar = Rp 162.000 Produk yang mana yang disetujui dapat dijual setelah split off point dengan harga tersebut di atas ? 3) Apakah jawab untuk produk B pada soal 2) berubah.000. Hitung biaya produksi per unit dan total yang dibebankan pada persediaan akhir masing-masing produk.000 Produk C = Rp225.000. sebagai hasil dari joint process Selama bulan Juli 2006 Joint processing cost adalah sebesar Rp Rincian tentang ke tiga jenis produk adalah sebagai berikut: Produk Produksi dalam unit Unit yang dijual Biaya proses lanjut Harga Jual per unit A 1.000 Produk B = Rp585.000 Diminta: 1). B dan C.SOAL JOINT COST PT EGP & Co memproduksi 3 jenis produk A.000 Rp900.000. jika biaya proses lanjut sebesar Rp 540.000 800 Rp225. Konsumen ingin membeli semua output masing-masing produk setelah split off point (tanpa diproses lanjut) dengan harga sebagai berikut : Produk A = Rp540. menggunakan metode alokasi joint cost ke produk berdasar market value method ( Persediaan barang jadi per 1 Juli 2006 tidak ada / nol) 2).000 Buat jawaban saudara disertai perhitungan yang jelas! .

8% $54.00 $100.000 Cost Joint Cost Bi Proses lanjut Total Cost Produksi 1) Cost / unit Nilai Persediaan total 2) Harga Konsumen Joint Cost per unit Margin at split off point Harga Jual Cost per unit Margin stlh proses lanjut 3) $54.000 $75.000 800 $25.000 $100.00 $54.000 $79.00 $6.000 $25.000 $25.00 $21.00 .000 1.E8-6 Joint Cost = 1 Unit Produced unit dijual 2 Separable process costs 3 Unit Sales price 4 Market Value (1x3) 5 Separable process costs 6 Hypotethical Value (4-5) 7 Percentage from total 8 Joint Cost allocation $288.00 $79.000 18.00 $100.000 A 1.800 $60.00 $15.000 $79.

Fixed cost per unit prod B = $18.000 Harga Jual Relevant Cost Margin = $80 $57 $23 .

sebagai hasil dari joint process cost adalah sebesar Rp 2.000 4.500 Rp540.000 2. jika biaya proses lanjut sebesar amnya fixed cost yang dialokasikan ke produk gan yang jelas! .592.000 Rp720.000 al yang dibebankan pada persediaan akhir metode alokasi joint cost ke produk berdasar ang jadi per 1 Juli 2006 tidak ada / nol) ut masing-masing produk setelah split off point ebagai berikut : t dijual setelah split off point dengan harga al 2) berubah.300 Rp945.000 Rp450.k A.000.000.000 C 5. B dan C.000 ah sebagai berikut: Produk B 3.000.

400 $105.00 $250.000 36.600 $65.000 $189.000 $41.000 100.600 3.000 .00 $43.000 $60.0% $288.000 $209.00 $240.000 $80.000 $50.00 $63.80 $104.000 $145.88 $4.000 4.500 $60.000 $478.000 $105.12 $288.88 $8.400 TOTAL $400.20 $21.88 $29.20 $16.3% $104.00 $20.00 $41.000 $63.400 5.000 45.000 $190.000 $129.12 $50.80 $80.B 3.0% $129.600 C 5.000 2.20 $31.000 $180.600 $60.300 $105.316 $25.

000 $6 (jadi lebih baik diproses lanjut) .: 3.

100 $900 $750 $550 $2.120 $30.500 $6.000 By Product A B $6.100 $4.530 $970 $550 $420 12.630 $900 $2.100 $900 $750 $550 Profit utk by product Bi Prod setelah split off Bi Pemasrn & Adm Total bi + keunt A dan B Beban joint cost utk A dan B Beban Joint Cost utk Main P Income Statement Sales Product Cost: Bi sebelum split off Bi prod setelah split off Total Bi Produksi Laba Kotor Bi Pemasarn & Adm Laba Bersih sblm pjk Main Product $75.000 $32.250 $1.750 $1.Sales Bi Prod setelah split off Bi Pemasrn & Adm Biaya prd sebelum split off ( Joint Cost ) Main Product $75.000 $24.350 $1.620 $11.870 $3.0% B $3.500 $44.000 $11.880 $6.000 $3.650 $750 $900 15.500 $1.0% .630 A $6.000 $3.500 $1.250 $1.880 By Product A B 15% 12% $900 $420 $1.

Total $84.500 $37.620 Total $84.200 .500 $13.500 $4.880 $32.300 $37.500 $7.500 $13.000 $33.500 $7.300 $26.500 $51.

500 x 25.000 9.000 4.500 x 15.900 Pers Awal Produksi Jumlah Penjualan Pers Akhir 1.000 + 23.900 Sales Cost Laba Kotor 9.000 unit 25.500 2.000 + d) Bi Produksi per unit = 174.000 15.900 .500.650.000 15.000 11.000 3.750 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 6.900.650.750 Kap Normal = 10.000 Rp 13.Biaya Bahan Baku Biaya TKL Bi Overhead Pbrk Total Bi Produksi Y = Y = Y = Y = 23.000 18.000 4.000 12.500 x 9.000 11.000 unit Produksi Harga Jual Rp Bi Umum & Adm = Rp a) Biaya Var per unit = 11.000 + 6.

Bi Umum & Adm Laba Operasi .

050.000 4.900 = 10.000 86.000 151.000 15.900.000 = = 237.000 5.500.450.X X X X = 174.900 9.900 = 39.000 .750.

500.18.61% .950.000 67.000 28.

000 $1.000 $900 $5.100 $3.100 $750 15.500 $6.000 $11.0% 12.250 .620 By Product A $3.000 By Product A $6.E8-2 Sales Manuf cost after separation Mark & Adm Expenses Manuf cost before split-off Profit A Profit B Main Product $75.100 $750 $4.350 $1.250 Market Value profit allowed Mark & Adm Expenses Manuf cost after separation Estimated value after split-off Manufacturing Cost Before Separation : 1) Manuf cost before separate 2) INCOME STATEMENT Main Product $32.0% A $6.

000 $30.000 2) S sold at split-off point 15.3% $50.000 33.000 x .60 $99.000 $3.000 $99.30 $129.0% $66.Main Product Sales Cost: Joint Cost Manuf cost after separation Total Cost Gross Profit Mark & Adm Expenses Operating Profit $75.000 S 15.000 $4.000 $30.500 $44.880 $6.000 44.650 $750 $900 E8-5 Joint Cost = 1 Unit Produced 2 Separable process costs 3 Unit Sales price 4 Market Value (1x3) 5 Separable process costs 6 Hypotethical Value (4-5) 7 Percentage from total 8 Joint Cost allocation $150.880 By Product A $6.000 $24.000 E 30.620 $11.350 $1.000 $24.120 $30.000 $24.000 $75.000 $32.100 $4.250 $1.000 $6.

000 x .Cost of S at split-off Gross profit of S S sold after further process Cost: Joint Cost Separable process costs Total Cost Gross profit 15.

500 B $3.500 .630 By Product B $1.500 $900 $550 TOTAL $84.500 $420 $3.630 TOTAL $37.500 $13.080 $550 $2.530 $900 $1.300 $37.By Product B $3.500 $7.

500 $13.000 $225.000 $27.000 100.000 $6.500 $1.530 $970 $550 $420 TOTAL $84.000 $27.000 Jawab (1) $5.00 $78.25 $78.500 $7.000 $33.200 C TOTAL 13.By Product B $3.630 $900 $2.000 $51.0% $150.300 $26.500 $51.7% $34.500 $37.750 .000 22.

000 $50.000 $28.750 $6.000 $74.$50.000 $25.000 .60 $99.000 $24.