文档介绍：Unit 6 Joint Product and By-Product Costing
Unit 6 - Joint Product and By-Product Costing
1 Introduction
When process output not be separately identifiable until reaching the `split-off point', the undifferentiated costs incurred up to that point - joint-product costs or pre-separation costs3>. It is difficult to determine positively what proportion of the pre-separation costs relates to each of the products emerging. Therefore necessary to use arbitrary methods of apportioning pre-separation costs.
Joint product
By-product
2 Joint Products (JP)
Resulting from the same process and having substantially equal importance in value to pany. After the separation stage, they may be sold in their existing state or further processed to give them a higher sales value.
Pre-separation costs be apportioned according to:
a) Sales value, such as:
I) the market value at the point of separation;
ii) The market value after further processing, . the final sales value;
iii) realizable value', or `notional sales value' method, . the final sales value less the post-separation costs;
b) Physical measurement, such as:
i) mon unit of measurement;
ii) Weighted in accordance with technical estimation.
3 Sell or Process Further
The only justification for further processing is the additional sales value from further processing> the post-separation costs