CN16HO - Chapter 16 Cost Allocation: Joint Products and...

Info iconThis preview shows pages 1–16. Sign up to view the full content.

View Full Document Right Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 1 Cost Allocation: Joint Products and Byproducts Chapter 16
Background image of page 1

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 2 Learning Objective 1 Identify the splitoff point(s) in a joint-cost situation.
Background image of page 2
2006 UofW Business School Accounting 311 L.DuCharme 3 Joint-Cost Basics Joint products Joint costs Separable costs Splitoff point Byproduct
Background image of page 3

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 4 Joint-Cost Basics Coal Gas Benzyl Tar
Background image of page 4
2006 UofW Business School Accounting 311 L.DuCharme 5 Joint-Cost Basics Timber (logs) 2x4s 1x8 clear Bark
Background image of page 5

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 6 Learning Objective 2 Distinguish joint products from byproducts.
Background image of page 6
2006 UofW Business School Accounting 311 L.DuCharme 7 Joint Products and Byproducts Sales Value High Low Main Products Joint Products Byproducts
Background image of page 7

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 8 Learning Objective 3 Explain why joint costs should be allocated to individual products.
Background image of page 8
2006 UofW Business School Accounting 311 L.DuCharme 9 Why Allocate Joint Costs? to compute inventory cost and cost of goods sold to determine cost reimbursement under contracts for insurance settlement computations for rate regulation for litigation purposes
Background image of page 9

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 10 Learning Objective 4 Allocate joint costs using four different methods.
Background image of page 10
2006 UofW Business School Accounting 311 L.DuCharme 11 Approaches to Allocating Joint Costs Approach 2: Physical measure Approach 1: Market based Two basic ways to allocate joint costs to products are:
Background image of page 11

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 12 Approach 1: Market-based Data (3 ways) Sales value at splitoff method Estimated net realizable value (NRV) method Constant gross-margin percentage NRV method
Background image of page 12
2006 UofW Business School Accounting 311 L.DuCharme 13 Allocating Joint Costs Example 10,000 units of A at a selling price of $10 = $100,000 10,500 units of B at a selling price of $30 = $315,000 11,500 units of C at a selling price of $20 = $230,00 Joint processing cost is $200,000 Splitoff point
Background image of page 13

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

View Full DocumentRight Arrow Icon
2006 UofW Business School Accounting 311 L.DuCharme 14 Allocating Joint Costs Example A B C Total Sales Value $100,000 $315,000 $230,000 $645,000 Allocation of Joint Cost: 100 ÷ 645 31,008 315 ÷ 645 97,674 230 ÷ 645 71,318 200,000 Gross margin $ 68,992 $217,326 $158,682 $445,000
Background image of page 14
UofW Business School Accounting 311 L.DuCharme 15 Sales Value at Splitoff Method Example Assume all of the units produced of B and C were sold. 2,500 units of A (25%)
Background image of page 15

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

View Full DocumentRight Arrow Icon
Image of page 16
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/07/2008 for the course ACCTG 311 taught by Professor Ducharme during the Spring '08 term at University of Washington.

Page1 / 44

CN16HO - Chapter 16 Cost Allocation: Joint Products and...

This preview shows document pages 1 - 16. Sign up to view the full document.

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