# Quantitative or Physical Unit Method–Allocating Joint Product Cost:

Learning Objectives:

1. Explain quantitative or physical unit method of joint cost allocation.

Quantitative or physical unit method attempts to distribute the total joint cost on the basis of some unit of measurement, such as pounds, gallons, tons, or board feet. Of course, the unit products must be measurable by the basic measurement unit. If this isn’t possible, the joint units must be converted to a denominator common to all units produced, For example, in the manufacture of coke, products such as coke, coal tar, benzol, sulfate of ammonia, and gas are measured in different units. The yield of these recovered units is measured on the basis of the quantity of product extracted per ton of coal.

## Example:

The example shows the use of weight as a quantitative unit method of joint cost allocation:

 Products Yield in Pounds of Recovered Product Per Ton Coal Distribution of Waste to Recovered Products Revised weight of Recovered Products Materials Cost of Each Product Per Ton of Coal Coke 1320.00lbs 69.474* 1389.474 \$13.895** Coal tar 120.00 6.316 126.316 1.265 Benzol 21.90 1.153 23.053 0.230 Sulfate of Ammonia 26.00 1.368 27.368 0.275 Gas 412.10 21.689 433.789 4.335 Waste (water) 100.00 ————- ————– ————– ————– Total 2000.00 100.00 2000.000 \$20.000 ======= ======== ======== ======= *[1,320  ÷ (2,000 – 100)] = 69.0474 **(1,389.474 / 2,000  ) × \$20 = \$13.895

# Quantitative or Physical Unit Method–Allocating Joint Product Cost:

Learning Objectives:

1. Explain quantitative or physical unit method of joint cost allocation.

Quantitative or physical unit method attempts to distribute the total joint cost on the basis of some unit of measurement, such as pounds, gallons, tons, or board feet. Of course, the unit products must be measurable by the basic measurement unit. If this isn’t possible, the joint units must be converted to a denominator common to all units produced, For example, in the manufacture of coke, products such as coke, coal tar, benzol, sulfate of ammonia, and gas are measured in different units. The yield of these recovered units is measured on the basis of the quantity of product extracted per ton of coal.

## Example:

The example shows the use of weight as a quantitative unit method of joint cost allocation:

 Products Yield in Pounds of Recovered Product Per Ton Coal Distribution of Waste to Recovered Products Revised weight of Recovered Products Materials Cost of Each Product Per Ton of Coal Coke 1320.00lbs 69.474* 1389.474 \$13.895** Coal tar 120.00 6.316 126.316 1.265 Benzol 21.90 1.153 23.053 0.230 Sulfate of Ammonia 26.00 1.368 27.368 0.275 Gas 412.10 21.689 433.789 4.335 Waste (water) 100.00 ————- ————– ————– ————– Total 2000.00 100.00 2000.000 \$20.000 ======= ======== ======== ======= *[1,320  ÷ (2,000 – 100)] = 69.0474 **(1,389.474 / 2,000  ) × \$20 = \$13.895