by product and joint product costing pdf

By Product And Joint Product Costing Pdf

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CA IPCC Students please refer to the attached file for solutions for important questions which came in previous examinations for Cost Accounting and also study notes. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning.

Joint products and by-products

To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Download Free PDF. Joint Product and By-Product. Muhammad Ali. Download PDF. A short summary of this paper. These products may be grouped into joint products or by-products, based on the value of product, profitability of the product, objectives and policies of the concern.

Joint products and by- products are equally important because of major difficulty to identify the cost of inputs separately and specifically. When cost incurred after the point of separation are known as "post split off" or "subsequent costs. Such a product can be a joint product which is more important if produced from the same raw material. This product is also called as Main Product. On the other hand, if the products are not of the same importance called as "By-Products.

Objectives of Joint Product Costing The following are the important objectives of joint product costing: 1 To facilitate product costing of inventory valuation and income determination. Methods of Apportionment of Joint Products The following are the important methods commonly used for apportionment of joint costs upto the point of separation. This method is very simple and conveniently applicable where the resultant products can be expressed in common units.

These physical units refer to weight or measure such as pounds, tonnes, gallons, bales, volume etc. This method is suitable where the joint products will be measurable in the same units. This method cannot be applied when joint products consist of different types of units like liquids and solids. This method is also taken into various relevant factors such as volume, mixtures, selling price, technical engineering and marketing processes. The ratio of joint costs can be calculated by physical quantities of each products ue multiplied with the weightage points.

Joint fixed costs are apportioned on the basis of contribution of each product whereas variable portion of joint costs are apportioned according to the volume of units produced. For this, standard costs are determined in advance for aU joint products based on past experience, technical aspects, operational efficiency and cost factors of each products etc.

The portion of total joint costs allocated to each product is equal to the ratio of the sales value of each product's total market value. Here, there are various kinds of market value methods: a Market Value at the Separation Point b Market Value After Further Processing c Net Realizable Value a Market Value at Separation Point: Under this method, the market value of the joint products at the split off point is ascertained on the basis of dividing joint cost.

Weightage is also given to the quantities of each product: b Market Value After Further Processing: In this method, joint cost are apportioned according to the ratio of final selling price of each product. A ratio is established on the basis of which the total costs before separation point is apportioned. Subsequent costs are added to arrive at product costs.

In other words, if the products produced are not as of equal importance, then the products of significantly low value are known as "by- products. Accounting Treatment or Method of Valuation of By-products The object of valuation of by-products cost accounting is to assign a portion of the total costs to each by-products. This is important to calculate the unit product cost and prepare the profit and loss account and balance sheet. This method also known as "crediting sales value less profit.

The following are the important methods included under this categories. Here the by-products are value at the opportunity lost of purchasing or replacing them. The opportunity cost of by-product refers to the cost which could have been incurred had the by-product being used as material could have been purchased from the market. The process account is credited with the value of by- product so ascertained.

Inter-Process Profits In usual practice of certain firms. The object is to show a margin of profit or loss on each process to performing the relative efficiency of each process. The difference between the cost and the transfer price is known as Inter-Process Profit.

On accounting complication of this technique is the fact that work in progress and stock figures at the end of the period will include a profit element. For balance sheet purposes, inter process profits cannot be included in stocks because a firm cannot make a profit by trading with itself.

Financial accounting requires stock to be valued at the lower cost or realizably valued. The unrealized profit, therefore, must be calculated and written back. We must convert the work in progress in to finished elements called "equivalent unit" so that the unit cost can be obtained. It consists of balance of work done on opening work in progress, current production done fully and part of work done on closing work in progress.

Once credit side entries are valued the equivalent units are ignored. Steps Involved for Calculation of Equivalent Units The following procedure to be followed for calculation of equivalent units : 1 Calculate the number of equivalent units after taking the percentage of degree of completion in respect of opening stock of work in progress.

Illustration: 1 From the following informations, find the profit made by each product, apportioning joint costs on a sales value basis : A B Rs. The joint cost is apportioned on technical evaluation based on the proportion of 5 : 3 : 2 to three grades respectively.

Apportion the joint cost. In October, the Pharmaceutical Company purchased 10, gallons of the raw materials at a cost of Rs.

Betryl can be sold at the split-off point or processed further and packaged fOl sale as an asthma medication. All further processing costs amount to Rs. The selling price of the veterinary grade anarol is Rs. Should the phannaceutical company further process the anarol into anesthetic? Assume, the resultant quantity of veterinary grade anarol produced is Rs. Anarol 2, Rs. Added Revenues Rs. After adding Rs. Total revenue earned on 2, gallons of veterinary grade Anarol is Rs.

Hence the profit come to Rs. Total profit earned if 2, gallons of Anarol and 1, gallons of Estyle were sold at the point of split off Rs. Since the profit on making veterinary grade of Anarol increases by Rs. Illustration: 4 In a chemical manufacturing company, three products A, Band C emerges at a single split off stage in department P, product A is further processed in department Q, product B in department R and product C in department S.

There is no loss in further processing of any of the three products. The cost data for a month are as follows : Rs. During the month under reference, the company sold all three products after processing them further as under: Products A B C Output sold Kgs 44, 40, 20, Selling price per Kg.

If these products were sold at the split off stage, that is, without further processing, the selling prices would have been Rs. Required: i Prepare a statement showing the apportionment of joint costs to joint products. I Mat. II Labour Overheads Rs.

Cost Units Units Rs. Material I 17, 6. Production may be the units that come up to the inspection 1itage. In that case opening stock plus receipts minus closing stock of WIP will represent production. It works out to 18, units and hence normal loss has been taken as 1, units. Illustration: 6 In manufacturing the main product A company processes the incidental waste into two by products A and B. From the following data relating to the product you are required to prepare a comparative profit and loss statement showing the individual cost and other details.

The total cost up to separation period was Rs. Joint cost upto separation point 3. Sales Rs. All three products are separated simultaneously at a single split off point. Product X and Yare ready for sale immediately upon split off without further processing or any other additional costs.

Product Z, however, is processed further before being sold. There is no available market price for Z at the split off point. The selling prices quoted here are expected to remain the same in the coming year. An additional Rs. There were no opening inventories of X, Y, or Z. Product X tons Rs. Final Sales Value 5,49, 6,60, 5,70, What do you understand by Joint Product?

Explain the important features of Joint Product. What are the objectives of Joint Product Costing? Explain the different methods of apportionment of Joint Product. What is mean by By-Products? What are the important methods of valuation of By-Products?

Joint product pricing

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The by-product is produced at the same time and from the same common process as the main product, although it may require further processing to make it marketable. The sales value of the by-product will be very low compared to the main product. Joint product costing is used when two or more products are produced.

Joint products and by-products

Joint products are two or more products that are generated within a single production process; they cannot be produced separately and incur undifferentiated joint costs. Take charge of your invoicing and accounting with Debitoor invoicing software. Try Debitoor free for 7 days.

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Management and Cost Accounting pp Cite as. Unable to display preview. Download preview PDF.

Joint products – What are joint products?

The object of this review is to present and to shed light on joint cost-allocation methods that are used in the healthcare sector for pricing purposes or cost-effectiveness purposes in different countries. The concept of jointness is illustrated through joint products and joint costs as found in the example of blood component production. The descriptive review, fundamentally concept-centric, highlights that the cost of blood products or blood price-setting is an issue in legislative proposals at the national and state levels and represents a matter of public interest and of public regulation. Numerous studies have focused on the blood costs for the health system. Nevertheless, the cost accounting and reimbursement system effectively underlying the acquisition, screening, and transfusion of blood appears, in practice, to be largely obscure. Google Scholar Citations. Toggle navigation.

In microeconomics , joint product pricing is the firm's problem of choosing prices for joint products , which are two or more products produced from the same process or operation, each considered to be of value. Pricing for joint products is more complex than pricing for a single product. To begin with, there are two demand curves. The characteristics of each could be different. Demand for one product could be greater than for the other. Consumers of one product could be more price elastic than consumers of the other and therefore more sensitive to changes in the product's price. To complicate things further, both products, because they are produced jointly, share a common marginal cost curve.

 Понятия не имею, - сказал Джабба.  - Пока он ползет и присасывается к нашей секретной информации. После этого он способен на. Он может стереть все файлы, или же ему придет в голову напечатать улыбающиеся рожицы на документах Белого дома. Голос Фонтейна по-прежнему звучал спокойно, деловито: - Можете ли вы его остановить. Джабба тяжко вздохнул и повернулся к экрану. - Не знаю.

Joint product and by-product costing

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Сзади, перпендикулярно туннелю, начинался коридор, едва освещаемый красными лампочками, вмонтированными в пол. - Пойдемте, - позвал Бринкерхофф, помогая Сьюзан вылезти. Она шла следом за ним точно в тумане. Коридор, выложенный кафельными плитками, довольно круто спускался вниз, и Сьюзан держалась за перила, стараясь не отставать. Воздух в помещении становился все прохладнее. Чем глубже под землю уходил коридор, тем уже он становился.

 Понятно.  - Она застонала. Все четко, ясно и. Танкадо зашифровал Цифровую крепость, и только ему известен ключ, способный ее открыть. Но Сьюзан трудно было представить себе, что где-то - например, на клочке бумаги, лежащем в кармане Танкадо, - записан ключ из шестидесяти четырех знаков, который навсегда положит конец сбору разведывательной информации в Соединенных Штатах. Ей стало плохо, когда она представила себе подобное развитие событий. Танкадо передает ключ победителю аукциона, и получившая его компания вскрывает Цифровую крепость.


 Домой? - ужаснулся Бринкерхофф.  - Вечером в субботу. - Нет, - сказала Мидж.

Он посмотрел на Сьюзан, стоявшую рядом с ним на платформе. Казалось, все происходящее было от нее безумно. Джабба вздохнул и снова вытер пот со лба.

Желаю веселого уик-энда. Чатрукьян заколебался. - Коммандер, мне действительно кажется, что нужно проверить… - Фил, - сказал Стратмор чуть более строго, - ТРАНСТЕКСТ в полном порядке.

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  1. David W.

    Figure Production process for joint and by-products. Methods of apportioning joint costs to joint products. Exhibit Illustration of apportionment of.

    19.05.2021 at 07:27 Reply
  2. Gaston D.

    A joint cost is a cost that benefits more than one product, while a by-product is a product that is a minor result of a production process and which has minor sales.

    21.05.2021 at 03:33 Reply

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