ch09 - Chapter 9 Joint Product and By-Product Costing...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 9 Joint Product and By-Product Costing LEARNING OBJECTIVES Chapter 9 addresses the following questions: Q1 What is a joint process, and what is the difference between a by-product and a main product? Q2 How are joint costs allocated? Q3 What factors are considered in choosing a joint cost allocation method? Q4 What information is relevant for deciding whether to process a joint product beyond the split-off point? Q5 What methods are used to account for the sale of by-products? Q6 How does a sales mix affect joint cost allocation? Q7 What are the uses and limitations of joint cost information? These learning questions (Q1 through Q7) are cross-referenced in the textbook to individual exercises and problems. COMPLEXITY SYMBOLS The textbook uses a coding system to identify the complexity of individual requirements in the exercises and problems. Questions Having a Single Correct Answer: No Symbol This question requires students to recall or apply knowledge as shown in the textbook. e This question requires students to extend knowledge beyond the applications shown in the textbook. Open-ended questions are coded according to the skills described in Steps for Better Thinking (Exhibit 1.10): Step 1 skills (Identifying) Step 2 skills (Exploring) Step 3 skills (Prioritizing) Step 4 skills (Envisioning)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
9-2 Cost Management QUESTIONS 9.1 Some goods are produced jointly; many products result from a common process. These are called joint products. Main products have high sales value relative to other products when split-off occurs. By-products have low sales value relative to the main products’ values. 9.2 Because all of the other products are sold at $200 or more, the product that sells for only $10 would probably be considered a by-product. Main products have relatively high sales values compared to by-products. 9.3 There are two methods of recognizing revenue from by-products. The revenue can be recognized at the split-off point, or recognized at the time of sale. The treatment depends on whether the NRV is positive or negative, and also on whether it is recognized at the time of production or sale. Negative NRV is always added to joint costs. When positive NRV is recognized at time of production, it is subtracted from joint costs. When positive NRV is recognized at time of sale, it may be treated as revenue, treated as non-revenue income, or subtracted from COGS. 9.4 Products from any of the following industries would be appropriate: oil and gas, chemical, lumber products, tour companies, meat production, wheat production, milling companies. 9.5 Joint costs are product costs that cannot be separately traced to individual products, so they are indirect with respect to individual products. Separable costs are the direct costs of producing separate products (but these costs may or may not be direct with respect to individual units). 9.6
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/07/2011 for the course BUS 352 taught by Professor Ng during the Winter '10 term at Wilfred Laurier University .

Page1 / 27

ch09 - Chapter 9 Joint Product and By-Product Costing...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online