Identify Each Item on the Following List as a Joint

question 108

Essay

Identify each item on the following list as a joint cost or a separable cost.
a. Cost of processing crude oil in a gasoline refinery.
b. Cost of processing timber (trees) at a sawmill.
c. Cost of processing lumber into different lengths and sizes at a sawmill.
d. Cost of raw tomato processing, tomatoes are to be used for different soups in a soup plant.
e. Cost of canning soup in a soup plant.
f. Cost of moulding plastic for use in making different toys on an assembly line.
h. Cost of processing water for human consumption.
i. Cost of processing pulp into paper.
j. Cost of processing pulp into cardboard.

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Definitions:

Process Cost System

A method of accounting used in manufacturing where costs are assigned to products based on the process they go through in production, suitable for industries where products are indistinguishable from each other.

Process Costing

A method of costing used in industries where production is continuous, assigning costs to units of output based on the process they undergo.

Process Cost System

An accounting methodology used for homogenous products that accumulates costs by process or department for continuous production.

Transferred-in Costs

Costs that have been incurred in one department and are carried forward to a subsequent department for further processing.