How does management determine how to classify each type of output from a joint process? Is this decided before or after production?

Expert Solution

Joint processing output is classified based on the relative sales value for each type of output. Joint products are those outputs that have the greatest sales value. By-products are those outputs that have some sales value, but not a sufficient amount to justify undertaking the joint process simply to obtain those outputs. Scrap is output that has no or very little sales value. Usually, the output classification is determined before production. Management decides whether a joint process output is a joint product, a or scrap based on the judgment of the relative sales value of for each type of output. However, in unusual cases, the actual output of the collaborative process may not go as planned. In such cases, management some may classify the output differently than what was originally intended.

Joint processing output is classified based on the relative sales value for each type of output. Joint products are those outputs that have the greatest sales value.

Samantha Mae Cerdeño answered 2 years ago

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