Joint Cost Allocation Methods

Several methods are available to allocate the joint production cost incurred up to the split-off point. These methods are: Quantitative method (or physical unit method): This is based on a physical measurement unit such as weight Weighted average method: This is based on a predetermined standard or index of production Market value method (or sales value method): This is based on the relative marke…

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By-Products

By-products: Definition and Explanation A by-product is a product with a relatively small total value that is produced simultaneously with a product of greater total value. The product with the greater value, commonly called the main product, is usually produced in greater quantities than the by-product. In most cases, manufacturers can exercise only a limited level of control over the quantity of…

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