Two or more products produced from a common input are

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Unformatted text preview: e 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 Joint Products Joint Costs Joint Input Common Production Process Oil Gasoline Chemicals Split-Off Point Managerial Accounting Separate Processing Final Sale Final Sale Separate Processing Separate Product Costs Final 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 processing co...
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This test prep was uploaded on 04/09/2014 for the course AFM 102 at Waterloo.

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