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Allocation of Joint Costs
Whereas two or more products of relatively high value emerge simultaneously from a single process, they are named as joint products. The processes such provide rise to these products is named as a joint process and the costs included are referred to as joint product costs. Joint products are not separately identifiable like individual products till their split off point. Split-off point is the point at that joint products become separate entities or are individually identifiable. Allocations of joint costs contain assigning the costs of the joint process to the products emerging at the split off point. Any type of costs beyond the split off point is referred to as separable costs.
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