Concept explainers
(1)
Concept introduction:
Relative Sales Value method of Cost Allocation:
Relative sales value method of cost allocation refers to the method of allocation of common costs on the basis of relative sales value. This method allocates joint costs based on the benefits received from the expense.
Preparation of reports showing cost allocation on a sales value basis to the three grades of tomatoes.
Concept introduction:
Income Statement:
Income statement is a statement which shows calculation of income of a company or a department. It shows net sales, all expenses, net income of all the departments separately.
Preparation of Income statement based on joint costs allocated on sales value basis.
(3)
Concept introduction:
Joint Cost Joint costs are costs incurred in joint manufacturing process which takes common inputs but produces multiple products.
Delivery Costs is a part of Joint Costs.
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MANAGERIAL ACCOUNTING FUND. W/CONNECT
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