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What Are a Joint Cost and a Splitoff Point

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What are a joint cost and a splitoff point?


Definitions:

Cost of Sale

The direct costs attributed to the production of the goods sold by a company.

Merchandise Inventory

Goods that a company has in stock and available for sale, listed as an asset on the balance sheet.

Periodic Inventory System

A periodic inventory system is a method of inventory valuation where a physical count of inventory is performed at specific intervals to determine the ending inventory balance and the cost of goods sold.

Accounts Payable

Liabilities or amounts owed by a company for goods or services that have been received but not yet paid for.

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