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  Accounting for Joint Product Cost

Accounting for Joint Product Cost

The meaning of joint products is two or more products generates intentionally and with similar inputs and containing more or less similar economic value. The major purpose of accounting of the cost is to apportion the joint costs acquired up to the split off point, in case of joint products. As described before, the manufacturing process is similar up to a specific stage and after crossing that stage; each product has separate manufacturing process. So the major problem is apportionment of the joint cost or the cost acquired up to the split off point. The entire cost of production of the joint product will be cost acquired up to the split off point accordingly apportioned along with the cost acquired after the split off point. There is no difficulty of charging the cost acquired after the split off point because the cost can be identified easily.

So the major problem is that of apportionment of the joint cost and the subsequent methods are employed for apportioning the same.

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