Separable costs - PowerPoint PPT Presentation

Cost Allocation

Cost Allocation. Chapter 12. Learning Objective 1. Explain the major reasons for allocating costs. Purposes of Allocation. Cost allocation supports a company’s cost management system. Strategic decision making. Operational control. External reporting. Purposes of Allocation.

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Cost Allocation: Joint Products and By-products

Cost Allocation: Joint Products and By-products. ACCT7320 Dr. Bailey Tuesday, February 17, 2009. Criteria to Guide Cost-Allocation Decisions. Cause-and-effect: Using this criterion, managers identify the variable or variables that cause resources to be consumed. Benefits-received:

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CHAPTER 16

CHAPTER 16. Cost Allocation: Joint Products and Byproducts. Joint Cost Terminology. Joint Costs – costs of a single production process that yields multiple products simultaneously.

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