"What's the Big Fuss About Learning Three Different Methods of Cost

question 81

Essay

"What's the big fuss about learning three different methods of cost allocation for joint products? The total cost doesn't change, and the real question that needs answering is whether to further process joint products or sell right away.Besides, our firm uses JIT inventory, so there aren't any ending inventories to cost."
Required:
Comment on these ideas.

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Definitions:

Operating Segments

Components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

Generating Revenue

This term refers to the process by which a business earns income through the sale of goods, provision of services, or other financial operations.

Financial Reporting System

A structured process or framework used by an entity to compile and present financial data in the form of financial statements.

Segment Information

Financial data that has been broken down into smaller parts, such as divisions or subsidiaries of a corporation, to analyze performance of different areas of the company separately.