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Joint Costs
Joint Costs
• Required : allocate joint costs between (A) and (B) using the previous
approaches .
Sell or Process Further Decisions.
• Manufacturers with joint production processes sometimes must
decide whether a product should be sold at the split-off point or
processed further before being sold . This called Sell or Process
Further Decisions .
• Relevant costs for this decisions are those that differ between the two
alternatives .
• Joint costs does not change in total whether products are processed
further or not ( sunk cost)
Examples :
• Consider the following :
• Joint costs JD 35100.
product Sales price per unit units
A 16 1500
B 8 2000
C 25 400