CHAPTER 15
Cost Allocation:
Joint Products and Byproducts
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Cost Terminology
Joint Costs (联合成本)– costs of a single production process that yields multiple products simultaneously(同时生产出多种产品的生产
流程
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的成本)
Splitoff Point (分离点)– the place in a joint production process where two or more products become separately identifiable(联合生产流程中的两个或多个产品能被分别确认的时点)
Separable Costs (可分属成本)– all costs incurred beyond the splitoff point that are assignable to each of the now-identifiable specific products(在分离点之后发生的能归属于每一个新的可单独确认的产品成本)
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Cost Terminology
Categories of Joint Process Outputs:
Outputs with a positive sales value
Outputs with a zero sales value
Product – any output with a positive sales value, or an output that enables a firm to avoid incurring costs
Value can be high or low
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Cost Terminology
Main Product – output of a joint production process that yields one product with a high sales value compared to the sales values of the other outputs
Joint Products – outputs of a joint production process that yields two or more products with a high sales value compared to the sales values of any other outputs
16-*
To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Cost Terminology
Byproducts – outputs of a joint production process that have low sales values compare to the sales values of the other outputs
16-*
To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Process Flowchart
Factory
Single Production Process
Joint Product #1
Byproduct
Joint Product #2
Steam:
An Output with Zero Sales Value
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Reasons for Allocating Joint Costs
Required for GAAP and taxation purposes
Cost values may be used for evaluation purposes
Cost-based contracting
Insurance settlements
Required by regulators(价格管制者的需要)
Litigation(诉讼)
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Joint Cost Allocation Methods
Physical Measures(实物计量法) – allocate using tangible attributes of the products, such as pounds, gallons, barrels(圆桶), etc.
Market-Based – allocate using market-derived data (dollars)(利用市场销售数据):
Sales value at splitoff(分离点销售价值法)
Net Realizable Value (NRV)(预计可实现净值法)
Constant Gross-Margin percentage NRV(固定毛利率可实现净值法)
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Physical-Measure Method
Allocates joint costs to joint products on the basis of the relative weight, volume, or other physical measure at the splitoff point of total production of the products(以产品在分离点处的相对重量、体积或其他实物测量为基础将联合成本分配给联合产品)
Exhibit15-2
Exhibit15-4
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Sales Value at Splitoff Method
(分离点销售价值法)
Uses the sales value of the entire production of the accounting period to calculate allocation percentage(使用会计期间全部产量的销售价值来计算分配百分数)
Example p320
Exhibit 15-3
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Net Realizable Value Method(预计可实现净值法)
Allocates joint costs to joint products on the basis of relative NRV of total production of the joint products during the accounting period.(以会计期间所有联合生产得到产品的相应预计可实现净值为基础把联合成本分配给联合产品)
NRV = Final Sales Value – Separable Costs
Exhibit 15-5
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Constant Gross Margin NRV Method(固定毛利率可实现净值法)
Allocates joint costs to joint products in a way that the overall gross-margin percentage is identical for the individual products(对所有的产品都采用相同的毛利率来将联合成本分配给联产品)
Exhibit 15-7
Joint Costs are calculated as a residual amount
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Method Selection
If selling price at splitoff is available, use the Sales Value at Splitoff Method
If selling price at splitoff is not available, use the NRV Method
If simplicity is the primary consideration, Physical-Measures Method or the Constant Gross-Margin Method could be used
Despite this, some firms choose not to allocate joint costs at all
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Sell-or-Process Further Decisions
In Sell-or-Process Further decisions, joint costs are irrelevant. Joint products have been produced, and a prospective decision must be made: to sell immediately or process further and sell later
Joint Costs are sunk
Separable Costs need to be evaluated for relevance individually
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Sell-or-Process Further Flowchart
Factory
Manufacturing
Single Production Process
Joint Product #1
Byproduct
Joint Product #2
Steam:
An Output with Zero Sales Value
Single Production Process
Joint Product #1
Joint Product #2
Further Processing Dept 1
Further Processing Dept 2
Final Product #1
Final Product #2
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To accompany Cost Accounting 12e, by Horngren/Datar/Foster. Copyright © 2006 by Pearson Education. All rights reserved.
Byproducts
Two methods for accounting for byproducts
Production Method – recognizes byproduct inventory as it is created, and sales and costs at the time of sale
Sales Method – recognizes no byproduct inventory, and recognizes only sales at the time of sales: byproduct costs are not tracked separately