Question 1 13 Marks, 23 Minutes Koinseb Holding is in the business of processing

Question

Question 1 13 Marks, 23 Minutes Koinseb Holding is in the business of processing different types of produce obtained from the oca community by adding value before shipping the final products to vanous customers In one its plants processes Palm fruit into organic oil, Carnal Mix Chicken Meal, and Animal feed Carnal Mix is sold to a manufacturer in the northern regions who uses it as a scrub for a body wash Koinseb Holding processes 20,000 Kilograms monthly The yields additional processing costs and selling prices are as follows Product Yield Sales value at Added costs Selling Price Split-off point Per Kg per kg NS NS NS 4 000 4 000 10 000 2 000 2 000 1 300 600 550 1250050 0 30 Carnal Mix Chicken meal Animal feed 800 550 450 0 20 Joint processing costs per 20,000 kilograms are Raw materials Labour Depreciation Other factory overheads REQUIRED Alocate the total joint costs to the dilferent products according to the NS 2 000 000 1600 000 400 000 4 000 000 MARKS Physicál Measure Method

Explanation / Answer

Requirement Allocate the joint costs to the different products accrding to the a Physical Measure Method Joint Processing cost per 20000 kgs are N$ Raw materials 2000000 Labour 1600000 Depreciation 400000 Other Factory Overhead 4000000 8000000 Product Yield Proportion-Qty of Product/Qty of Total Prod Joint Cost Allocated as per Physical measure Oil 4000 0.2 1600000 Camal Mix 4000 0.2 1600000 Chicken Meat 10000 0.5 4000000 Animal Feed 2000 0.1 800000 20000 1 b Cost per Equivalent Unit Joint Cost Allocated Cost per Equivalent units=Jt Cost/20000 kgs Oil 1600000 80 Camal Mix 1600000 80 Chicken Meat 4000000 200 Animal Feed 800000 40 c Net Realisation value Method Cost Allocated to a joint Product= NRV of Product/NRV of Total Production *Total Joint Costs NRV= Estimated Sales Value -Estimated Cost to Further process and sell d Product Yield Sales Price per Kg Total Estimated SP Added Cost per Kg Total Added Cost NRV Proportion Proportion *Total Jt Cost Oil 4000 2000 8000000 0.5 2000 7998000 0.394091 3152729 Camal Mix 4000 1300 5200000 0.3 1200 5198800 0.256164 2049313 Chicken Meat 10000 600 6000000 0.2 2000 5998000 0.295544 2364349 Animal Feed 2000 550 1100000 0 1100000 0.054201 433609 20294800 1 8000000 e Sales Value at Split off Point Product Sales Value at Split off Point Proportion Proportion*Total Joint Costs Oil 1250 0.409836066 3278689 Camal Mix 800 0.262295082 2098361 Chicken Meat 550 0.180327869 1442623 Animal Feed 450 0.147540984 1180328 3050 8000000

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