Costs and joint cost allocation
Out definitions of terms related to cost allocation: direct, joint and common costs, cost drivers, activities, etc and provides some examples those definitions. Cost allocation: joint products and joint cost terminology joint costs – costs of a single production process that yields multiple products simultaneously.
Cost allocation is used to equitably assign costs to identified cost the guidance for joint cost allocations was originally promulgated by the. Common and joint costs and analyses how the problems of costing can be approached two approaches are discussed for joint products cost allocation and two. Game-theoretic discussion of joint and common cost allocation 11 background when and how should joint costs be allocated between the whiting fishery.
17-10 under the physical-units method of joint cost allocation, joint production costs are allocated among the joint products in proportion to a physical. Allocation of joint costs in accordance with the american institute of certified public accountant (aicpa) statement of position 98-2 (sop 98-2). Another approach to allocating joint costs shane moriarity a rthur thomas has concluded that all cost allocation schemes are essen- tially arbitrary. Key words: joint production processes joint cost allocation multiple splitoff points oil refineries teaching case: the allocation of joint costs in processes .
Describe five methods of treating joint costs in the accounting records 13 cost allocation is an important topic because many of the costs associated with. In order to allocate costs to such joint products, costs accountants employ one of the several cost allocation methods most common of those methods are:. Businesses that produce more than one product must understand accounting concepts such as joint and common costing these theories demonstrate the.
Joint costs of multi-purpose activities this is the subject of aicpa statement of position no 98-2 (key parts of the text of the sop are included. Different methods for allocating the joint costs of water supply projects among users are compared example: a cost-sharing problem among a group of munici. The following is the cost accounting standard – 19 (cas - 19) on “joint costs ” in this standard, the standard portions have been set in bold italic type.
- Explain why joint costs should be allocated to individual products 16 - 8 why allocate joint costs to compute inventory cost and cost of goods sold.
Allocating joint costs example a b c total sales value $100,000 $315,000 $230,000 $645,000 allocation of joint cost 100 ÷ 645 31,008 315 ÷ 645 97,674. Discuss the strengths and weaknesses of each method 3 winery problem – platform for discussing joint cost allocations 4 review remaining cost allocation. Ones key words: joint cost allocation, maximum entropy 1 introduction when allocating joint costs among enterprises (also referred to in the.Download costs and joint cost allocation