OBJU5joint_costssupp04 - State the preferred method and the...

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COST AND MANAGEMENT ACCOUNTING 2 UNIT 5 - Supplementary Notes: Cost Allocation: Joint Products and Byproducts LEARNING OUTCOMES : 1. Define the term Joint Cost and identify the split-off point(s) in a joint cost situation. 2. Distinguish between joint product, byproduct, main product , and scrap . 3. Discuss the reasons for allocating joint costs to individual products. 4. Describe and demonstrate four methods of allocating joint costs: Sales Value at Split-off, Physical Measures, Estimated NRV, and Constant GP% NRV Methods. 5. Identify the criterion used to support market-based joint cost allocation methods.
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Unformatted text preview: State the preferred method and the benefits of using this method. 6. Explain why joint costs are irrelevant in deciding whether to sell products at the split-off point or process further. (Recall the relevant cost decision as to whether to sell at split-off or process further). 7. Describe the method of accounting for by-products. Demonstration and Assignment Material: handout with supplementary questions. RF 06/04...
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