Question

describe allocation of joint costs across products

Answer 1

allocation of joint costs across products:

The focus of joint costing is on allocating costs to individual products at the split-off point. When a joint production process yields one product with a high total sales value, compared with total sales values of other products of the process, that product is called a main product.

Joint Cost Allocation Methods:

1.Physical measurement method

2.Relative sales value method

3.Net realizable value (NRV) method

Physical measurement method:
Joint expenses are designated dependent on number of units or physical amount, for example, weight, volume or length of every item in respect to add up to generation.

Relative sales value method:
This strategy allots joint expenses based on assessed deals estimation of a given joint item in respect to the business estimation of aggregate joint generation.

Net realizable value (NRV) method:
For items that require further preparing, NRV strategy is more reasonable on the grounds that it considers, the extra costs expected to additionally process and offer the joint items.