JBCG

 In joint process, one product line cannot be manufactured

without producing others.
 Operations Manager – minimize or cancel wastes
 Cost Accountant – provide reports on where costs and wastes
might be reduced
 The total cost incurred for material, labor, and overhead
during a joint process is called the joint cost of the
production process
 Joint products/primary products/main products/co-products
 Key outputs of a joint process
 By-products and Scrap
 Incidental outputs of a joint process
 Both are salable
 Waste
 Final residual output which has no sales value
 Point at which joint process outputs are first identifiable as
individual products
 A joint process can have one or more split-off points.
 Joint costs include all direct material, direct labor and
overhead costs incurred up to the split-off point.
 Before committing resources to a joint process,
management’s first decision is whether total expected
revenue from selling the joint output “basket” of products is
likely to exceed total expected processing costs:
 Joint cost
 Separate processing costs after split-off
 Selling expenses for the goods
 Disposal costs for any waste materials
 INCREMENTAL REVENUE
 Physical Measure Allocation
 Monetary Measure Allocation
 Sales Value at Split-off
 Net Realizable Value at Split-off
 Approximated Net Realizable Value at Split-off
Joint Tons Sales Price Mktg Cost Sep Cost per Final Sales
Product Produced per Ton at per Ton Ton if Price per Ton
Split-off Regardless processed
when Sold Further

Breast 3,800 $2,800 $200 $100 $3,200

Ground 2,400 1,800 100 100 2,100

Whole 2,800 1,200 50 60 1,500

Joint Tons Sales Price Total Sales Allocated Total
Product Produced per Ton at Value at Joint Cost Allocated
Split-off Split-Off per Ton Joint Cost

Breast 3,800 $2,800 $10,640,000 $600 $2,280,000

Ground 2,400 1,800 4,320,000 600 1,440,000

Whole 2,800 1,200 3,360,000 600 1,680,000

Total 9,000 $18,320,000 $5,400,000

Joint Tons Sales Price Total Sales % of Joint Cost Total Allocated
Product Produced per Ton at Value at Total Allocated Joint Cost
Split-off Split-Off Sales Val Joint Cost per Ton
Breast 3,800 $2,800 $10,640,000 58% $5,400,000 $3,132,000 $824.21
Ground 2,400 1,800 4,320,000 24 5,400,000 1,296,000 540.00
Whole 2,800 1,200 3,360,000 18 5,400,000 972,000 347.14
Total 9,000 $18,320,000 $5,400,000
Joint Tons NRV per Total NRV % of Joint Cost Total Allocated
Product Produced Ton at at Split-off Total Allocated Joint Cost
Split-off NRV Joint Cost per Ton
Breast 3,800 $2,600 $9,880,000 57% $5,400,000 $3,078,000 $810.00
Ground 2,400 1,700 4,080,000 24 5,400,000 1,296,000 540.00
Whole 2,800 1,150 3,220,000 19 5,400,000 1,026,000 366.43
Total 9,000 $17,180,000 $5,400,000
Joint Tons NRV per Total NRV % of Joint Cost Total Allocated
Product Produced Ton at at Split-off Total Allocated Joint Cost
Split-off NRV Joint Cost per Ton
Breast 3,800 $2,900 $11,020,000 57% $5,400,000 $3,078,000 $810.00
Ground 2,400 1,900 4,560,000 23 5,400,000 1,242,000 517.50
Whole 2,800 1,390 3,892,000 20 5,400,000 1,080,000 385.71
Total 9,000 $19,472,000 $5,400,000
 Net Realizable Value (NRV) Approach
 Reduce WIP-Joint Products
 Reduce COGS
 Realized Value Approach
 Present as Other Revenue
 Present as Other Income
Particulars Values
Total processing for the month 10,000 tons of Turkey
Total tons of output 9,000 tons of Joint Products
By-products from joint product 1,000 tons / 2M pounds
production
SP per pound of by product $0.30
Processing costs per pound of by $0.08 for Labor and $0.02
product for OH
NRV per pound of by product $0.20
Sales $ 7,200,000
COGS
Beg. FG $ 0
CGM ($5.4M-$400T) 5,000,000
CGA $ 5,000,000
Ending FG (277,500) (4,722,500)
Gross Margin $ 2,477,500
Operating Expenses (1,600,000)
Income from Principal Operations $ 877,500
Other Income
Royalties 80,000____
Income Before Income Taxes $ 957,500
Sales $ 7,200,000
COGS
Beg. FG $ 0
CGM 5,400,000
CGA $ 5,400,000
Ending FG (300,000)
Unadjusted CGS 5,100,000
NRV of by-product (400,000) 4,700,000
Gross Margin $ 2,500,000
Operating Expenses (1,600,000)
Income from Principal Operations $ 900,000
Other Income
Royalties 80,000____
Income Before Income Taxes $ 980,000
Sales $ 7,200,000
Other Revenue (by-product sales) 600,000
Total Revenue $ 7,800,000
COGS
Beg. FG $ 0
CGM 5,400,000
CGM of by product 200,000
CGA $ 5,600,000
Ending FG (311,000) (5,289,000)
Gross Margin $ 2,511,000
Operating Expenses (1,600,000)
Income from Principal Operations $ 911,000
Other Income
Royalties 80,000____
Income Before Income Taxes $ 991,000
Sales $ 7,200,000
COGS
Beg. FG $ 0
CGM 5,400,000
CGA $ 5,000,000
Ending FG (300,000) (5,100,000)
Gross Margin $ 2,100,000
Operating Expenses (1,600,000)
Income from Principal Operations $ 500,000
Other Income
Royalties 80,000
By Product Sales 400,000
Income Before Income Taxes $ 980,000
 CREATING A BETTER
LEARNING EXPERIENCE
JBCG

Ďakujem za počúvanie