In a joint production process, joint product costs are:
A) Those costs incurred after the split-off point.
B) Allocated to outputs (products) to facilitate short-term decision making.
C) Not relevant to the decision whether to produce at all.
D) Those that are incurred before the split-off point.
E) Relatively small compared to costs incurred after the split-off point.

Question

Quizplus · Accepted Answer

Joint product costs are those costs that are incurred before the split-off point in the joint production process. After the split-off point, the joint products are processed further into separate products, and the costs incurred beyond this point become product-specific and are no longer joint product costs. Joint product costs are important for long-term decision-making, including whether to continue producing the joint products or to sell them as they are.

In a Joint Production Process, Joint Product Costs Are