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each joint product can be recognized as a
separate product is called the split-off point.
split-off point Managerial Accounting 12-30 Joint Costs and Joint Products
Process Oil Gasoline Chemicals Split-Off
Managerial Accounting Separate
Sale 12-31 Joint Products: Sell or Process Further Joint costs are irrelevant in decisions regarding what to
do with a product from the split-off point forward. ignore joint allocated product costs (which are
usually allocated to end products on the basis of the
relative sales value or some other basis). Although
allocation is needed for some purposes such as
balance sheet inventory valuation, allocations of this
kind are very dangerous for decision making. It will always be profitable to continue processing a joint
product after the split-off point so long as the
incremental revenue exceeds the incremental
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This test prep was uploaded on 04/09/2014 for the course AFM 102 at Waterloo.