Asked by Abigail Zurita on Jul 14, 2024
Verified
Define joint costs and explain how joint costs can be allocated.
Joint Costs
Costs that are incurred in the process of producing two or more products simultaneously and cannot be directly assigned to a particular product.
Allocation
The process of distributing resources, costs, or revenues among various accounts, departments, or products based on specific criteria.
- Define joint costs and explain methods for their allocation.
Verified Answer
HH
Haziq HafiyJul 20, 2024
Final Answer :
Joint costs are costs incurred to produce or purchase two or more products at the same time.Joint costs can be allocated to the products using a physical basis,which allocates costs on a physical characteristic as a ratio of the total,or using a value basis,which allocates costs in proportion to the sales value of the output produced by the process at the "split-off point".
Learning Objectives
- Define joint costs and explain methods for their allocation.