Of the various methods used to allocate joint costs, which makes the most sense to you?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Of the various methods used to allocate joint costs, which makes the most sense to you?
In accounting a joint cost is referred to as that cost that is related to more than one product. Hence we can say that a joint cost is that cost or expense or expenditure that benefits more than one product. In manufacturing there can be cases of joint processes in which we have only one input that yields more than one input. The costs that are incurred in a joint process is called a joint cost.
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