Joint Product Costs & Splitoff Point - Method of Costing, Cost Accounting Video Lecture | Cost Accounting - B Com

Oh kiss to saw joint products and
byproducts to understand what our joint
products will be suppose just now we did
process it comes right now
now suppose you have a process right now
what happens in this process you have
maybe raw materials and you have made
the other conversion comes so what are
these total cost least this is the cost
of the process right as a result of this
process now suppose you have two
products you have product X and you have
product right now let's say you have
incurred you you have incurred a cost of
$100,000 now this hundred thousand
dollars how are you going to allocate to
product its what will be the basis of
that portion because you don't know you
just put in materials and as a result
you are going to so a whole dilemma here
our problem here is that this process
cost that you're incurring this one
hundred thousand that you are incurred
have to be a portion which means product
X and product Y and what is the basis
for a bush-league of these so we have
try and estimate you try and find out so
some reasonable basis of apportionment
of these joint processing occurs raw
material one raw material to raw
material three
okay they all of them go into process
one from process one whatever is the
output needs to process two you've done
this before
no problem next now what happens it's
possible that at this point the output
that comes out is our two outputs one is
called product a one is called product
possible their students now this point
at this point this point is called the
split of points this point is called the
split of point where the products
stick to our world distance Oh what is
this called split up now the problem is
the process one and process to have
incurred dead cause this total costs
these total costs are the cost of making
product a and for yes or no how much is
a shares is how much is shared may be
difficult to say mind your students
product PL product we may be sold at
this point as it is and sometimes or
sometimes there may be no market for
this particular product or product P may
be that we need to process them further
in order to have a market maja in order
to have a market it is possible that
product a may be sold as it is or we
process it further and then sell product
it is possible that both this product
and this product that is product if not
fully processed and product a more
processed further further process versus
what we have obviously this more for the
process product e is going to be more
costly than me then the product which is
soon at the split of point without
further processing so what what is our
water joint products join products of
products which come out of a common
process one or more common processes
when you get the only products they are
college our products and our problem is
in how to apportion the joint processing
goes to product the product once product
a whatever products join products are
they they may be sold at split of point
if there is a market at split of point
again we sorted that sprit of point or
or if there is no market at the split of
point they have to be processed further
and then they would be so of course this
firm the process this cost which is that
this is only for product this I know is
only product is Costin this will be a
portion only to provide you that is that
is actually no apportionment as that we
know it is clear that it belongs to for
nothing here students product be all
so maybe so for that process sometimes
we need to take a decision on whether
people process further process but you
get the general idea of water join us so
join products and byproducts are
multiple products which which comes from
common law system a common process or
processes common joint costs are
incurred till the schedule point and
these have to be suitably allocated
sheer students that is all you have to
know common process you get to that's
they may be joined products or
byproducts what is the small difference
we just discuss now the common joint
cost which our team couldn't take the
split of point those have to be suitably
join products have significant market
values and they need to be joined caused
me to be suitably enough inventory then
why are they elevated that is the basis
in which you will value in which so
suppose you get one thousand units of a
and two thousand units in you're able to
send only 500 or 800 units of P the
balance 200 units of B will be in stock
will be in inventory what is the value
of this energy in order to find out the
value of the inventory we have to
apportion the joint goes cost can
incurred after split off for the
processing cost of course can be easily
I think an example of a joint product
phase when you process milk you may get
butter cheese and products possible
follow so these are joint products by
products on the other hand are low value
products which are produced along with
the main so why joint products have more
or less all have significant all the
products could have a significant market
value by products are no valuables for
example when you refine sugar it is
possible that molasses molasses are just
a Viper but you can say that varies yeah
sawdust may be a by-product of the
timbre of this
okay students yeah