ACCA PAPER F2 MANAGEMENT ACCOUNTING 管理会计考试讲义笔记 11 Process Costing,joint product and by-product.docVIP

CH11 PROCESS COSTING, JOINT PRODUCTS AND BY-PEODUCTS 　1.CONTRASTING JOINT PRODUCTS AND BY-PRODUCTS　　Joint products are two or more products which are output from the same processing operation, but which are indistinguishable from each other up to their point of separation. A joint product is regarded as an important saleable item, and so it should be separately costed. The profitability of each joint product should be assessed in cost accounts.　　A by-product is a supplementary or secondary product （arising as the result of a process） whose value is small relative to that of the principal product. A by-product is not important as a saleable item, and whatever revenue it earns is a ‘bonus’ for the organization. Because of their relative insignificance, by products are not separately costed.　　.PROBLEMS IN ACCOUNTING FOR JOINT PRODUCTS　　Joint products are not separately identifiable until a certain stage is reached in the processing operations. This stage is the ‘split-off point’, sometimes referred to as the separation point. Costs incurred prior to this point of separation are common or joint costs, and these need to be allocated （apportioned） in some manner to each of the joint products.　　　The problems in accounting for joint products are basically of two different sorts.　　A. How common costs should be apportioned between products, in order to put a value to closing stocks and to the cost of sale （and profit） for each product;　　B. Whether it is more profitable to sell a joint product at one stage of processing, or to process the product further and sell it at later stage.　　. DEALING WITH COMMON COSTS　　The problem of costing for joint products concerns common costs, that is those common processing costs shared between the units of eventual output up to their ‘split-off point’. Some method needs to be devised for sharing the common costs between the individual joint products for the following reasons.　　A. To put a value to closing stocks of each joint produc