Ch 17. ... Lecture Flashcards
the costs of a production process that yields multiple products simultaneously
joint costs
the juncture in a joint production process when two or more products become seperately identifiable
split off point
all costs (manufacturing, marketing, distribution, and so on) incurred beyond the split off point that are assigned to each other the specific products identified at the split off point
seperatble costs
outputs can have a positive sales value, or a zero sales value
joint process output categories
any output with a positive sales value, or an output that enables a firm to avoid incurring costs
product
output of a joint production that yields one product with a high sales value compared to the sales values of the other outputs
main product
outputs of a joint production process that have low sales values compared to the sales values of the other outputs
byproducts
outputs of a joint production process that yields two or more products with a high sales value compared to the sales values of any other outputs
joint products
2 approaches to allocating joint costs
- market based
- physical measure
allocate uing market derived data (dollars)
market based
allocate using tangible attributes of the prodcuts, such as weight, quantity or volume of the joint products
physical measures
if selling prices are not availabe, the ____ method is the best alternative
NRV
two methods for accounting for byproducts
- production method
- sales method
recognizes byproduct inventory as it is created; does not recognize sales and costs of byproduct seperately
production method
recognzies no byproduct inventory; recognizes sales only because byproduct costs are not tracked seperately. (byproduct costs remain in the main product COGS)
sales method
