Joint and by Product Costing Homework Help
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Joint Product Cost Vs. By Product Cost
A joint cost is a cost that is applicable on more than one item whereas a by-product cost is a cost that is generated by the minor result from a huge production process. A production process that is known to split up the final product into multiple by products should also provide them proper costing. Split off point is the end where a company can find out the final product. Any manufacturing cost allotted to the process before the split off point must be justified. And this justification is done by joint and by product costing homework help.
In this article for joint and by product costing homework help we discuss the allocation of joint cost based on various parameters.
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Allocation of joint Costs
Now as per GAAP, any cost incurred prior to the split off point must be specified and allocated to the products, otherwise they would be treated as previous costs. There are two most widely used methods for allocation of joint costs, as per our joint and by product costing homework help article.
1. Allocation based on sales value: through the split off point, all the costs are added and the sales value of all determined joint products is found. In this case the bi products are rather avoided, and costs are not allotted to them. As our joint and by product costing homework help writers say, this method is widely used for its simplicity of operations.
2. Allocation based on gross margin: after the split off point whatever cost has been incurred by each joint product is added altogether. That amount is later subtracted with the complete revenue individually earned by the product.
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