A joint input costing $500 results in four distinct products at the point of split-off. Products J, K and L are main products, and product M is a by-product. Relevant data follows: Sales Value Separable Sales Value After
Product at Split-Off Cost Further Processing
J (main)$200 $100 $400
K (main)300 200 600
L (main)100 -- --
M (by-product)20 10 40
If the revenue from product M is recognized at the time of sale, what amount will be recorded as the cost of product M inventory at the time of split-off?
A)$0
B)$10
C)$20
D)$30

Question

Quizplus · Accepted Answer

By-products are typically assigned no cost at the split-off point, so the cost of product M inventory at the time of split-off is $0.

A Joint Input Costing $500 Results in Four Distinct Products