A manufacturing unit producing Product X also generates a by-product Y, which undergoes additional processing to obtain the finished product. The…

Apportionment of Joint Costs Particulars X (₹) Y (₹) Selling Price 16,000 8,000 Less: Estimated profit 4,000 (25% of ₹16,000) 1,600 (20% of ₹8,000) Cost of sales 12,000 6,400 Less: Selling & Distribution exp. (Refer working note) 267 (₹400 × 2/3) 133 (₹400 × 1/3) Less: Subsequent cost 5,000 3,000 Share of Joint cost 6,733 3,267 So, Joint cost of manufacture is to be distributed to X & Y in the ratio of 6733:3267. Statement showing Cost of Production of X and Y Elements of cost Joint Cost Subsequent Cost Total Cost X Y X Y X Y Material 3,367 1,633 3,000 1,500 6,367 3,133 Labour 2,020 980 1,400 1,000 3,420 1,980 Overheads 1,346 654 600 500 1,946 1,154 Cost of production 11,733 6,267 Working Note: Calculation of Selling and Distribution Expenses Particulars (₹) Total Sales Revenue (₹16,000 + ₹8,000) 24,000 Less: Estimated Profit (₹4,000 + ₹1,600) (5,600) Cost of Sales 18,400 Less: Cost of production: Joint Costs (10,000) Subsequent costs (₹5,000 + ₹3,000) (8,000) Selling and Distribution expenses (Balancing figure) 400