Question

PT TOBA produces two types of products both TAKO and TAKI through joint production process. Both products must be further processed and then it can be sold. In April 2016 the production cost incurred consisted of a prime cost of $ 10,000, a direct labor cost of $ 4,000 and a conversion cost of $ 14,000. The production process in April produced 500 units of TAKO and 2,000 TAKI units. The cost for further processing TAKO is $ 5 per unit and TAKI $ 10 per unit. The selling price of TAKO and TAKI per unit is $ 25 and $ 20.
Requested: During April 2016 has sold 400 units of TAKO and 1700 units of TAKI, using the NRV method, calculate the gross profit earned in April 2016.

Note : PT TOBA is an example of a firm

Answer 1

Prime cost	10,000
Direct Labor cost	4,000
Conversion cost	14,000
Total joint cost	28,000
	TAKO	TAKI	Total
Units produced	500	2,000	2,500
Apportionment of joint cost ($ )	5,600	22,400	28,000
Apr-16
	TAKO	TAKI	Total
Units sold	400	1,700
	$	$
Selling price	25	20
Sales Revenue	10,000	34,000	44,000
Less: Joint cost	(5,600)	(22,400)
Less: Further processing cost	(2,000)	(17,000)
Gross Profit	2,400	(5,400)	(3,000)