Two or more consumable or usable products having a similar economic value separated in the course of a manufacturing process are called joint products. Some joint products need further manufacturing operations to realize the final products. It is , therefore, essential to determine the cost 0f individual products. End or final products like gas, crude oil, raw LPG arising out of petroleum extracting industry is an instance of realization of joint products. Crude oil is further processed to obtain petroleum of different usable products like kerosene, petrol, diesel, lubricating oil and so on.
Analysis Of Joint Cost
Analysis Of Joint Cost
The nature of raw material decides the types of joint products. A proper analysis of joint costs is essential. Effective control and allocation of joint costs to joint products need an analysis of joint costs.
Joint cost control is required for:
* Recording, classifying and allocating
* Ascertainment of profit or loss on each line of operation
* Identification of most the profitable products' mix
* Ascertainment of selling price of joint products.
Joint cost control is required for:
* Recording, classifying and allocating
* Ascertainment of profit or loss on each line of operation
* Identification of most the profitable products' mix
* Ascertainment of selling price of joint products.