Bhimani, Horngren, Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
2 Income statement through gross margin for alpha
Sales
(38,400 kg
×
€5)
€192,000
Production costs Allocated joint costs
€102,000
Department 2
38,000
Department 4
23,660
Total costs of production 163,660
Deduct estimated net realisable
value of Beta
15,900
Net cost of production 147,760
Deduct closing stock
29,552
Cost of goods sold
118,208
Gross margin €73,792 Estimated net realisable value of Beta equals the revenue from Beta (€24,000) minus its related marketing costs (€8,100). Closing stock equals the net cost of production
(€147,760) times 20%.
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