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Batangas State University

LECTURE NOTES

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neffhbaculodmz
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44 views7 pages

Batangas State University

LECTURE NOTES

Uploaded by

neffhbaculodmz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Batangas State University 1

MARKET VALUE
METHOD
Batangas State University 2

ILLUSTRATIVE PROBLEM

Francis manufactures three joint products from a joint process. The following data pertains to
operations of September.

Required: Allocate the joint cost of P42,000 using:

1. Market Value Method


2. Average Unit Cost Method
Batangas State University 3

MARKET VALUE METHOD

TOTAL MV *
PERCENTAGE

MARKET VALUE OF EACH PRODUCT /


TOTAL MARKET VALUE (42/70, 18/70,
10/70)
*** HOWEVER IF IT RESULT TO NOT
EXACT PERCENTAGE THE METHOD TO
USE IS 42/70 (PRODUCT A MV / TOTAL
GIVEN GIVEN UNITS PRODUCED * MV)
MV AT SPLIT OFF
Batangas State University 4

AVERAGE UNIT
COST METHOD
Batangas State University 5

AVERAGE UNIT COST METHOD

UNITS PRODUCED *
AVERAGE UNIT COST

GIVEN JOINT COST / TOTAL


UNITS PRODUCED
(42,000 /10,000)
Batangas State University 6

In cases that there is additional


processing cost in the given, add
it to the share in joint cost to
determine total production costs
Batangas State University 7

Direct Labor Variances


Labor rate and efficiency variances relate to the same period because,
unlike materials, labor services cannot be purchased in one period,
stored and then used in the next period.

Formula:

Actual Hour * Actual Rate (1) Actual Hour * Standard Rate Standard Hour * Standard Rate (3)
(2)

Labor Rate (1-2) Labor Efficiency (2-3)

TOTAL VARIANCE

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