Inventory Accounting part 7

Có nhiều trường hợp một công ty sẽ hoạt động một quá trình sản xuất duy nhất mà kết quả trong hơn một sản phẩm, không ai trong số đó có thể được xác định rõ ràng thông qua các giai đoạn đầu của sản xuất. Ví dụ sản xuất sáp nhập như vậy là trong ngành công nghiệp sản phẩm gỗ, cây có thể được cắt thành nhiều loại sản phẩm cuối cùng, hoặc bao bì thịt, một con vật có thể được cắt thành nhiều hàng hoá khác nhau đã hoàn thành....
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Inventory Accounting part 7 10 Joint and By-Product Costing1 10-1 IntroductionThere are many instances where a company will operate a single production processthat results in more than one product, none of which can be clearly identifiedthrough the early stages of production. Examples of such merged production are inthe wood products industry, where a tree can be cut into a wide variety of end prod-ucts, or meat packing, where an animal can be cut into many different finishedgoods. Up to the point where individual products become clearly identifiable in theproduction process, there is no clear-cut way to assign costs to products. This issueis of considerable importance to the inventory accountant, who must have aconsistent method for assigning costs to these items. We will discuss several cost al-location methods in this chapter that deal with this problem and also note the use-fulness (or lack thereof) of these allocation methods. The key point emphasized by this chapter is that the allocation of costs throughany method discussed in this chapter is essentially arbitrary in nature—it results insome sort of cost being assigned to a joint product or by-product, but these costs areonly useful for financial or tax reporting purposes, not for management decisions. 10-2 The Nature of Joint CostsTo understand joint products and by-products, one must have a firm understandingof the split-off point. This is the last point in a production process where it is impos-sible to determine the nature of the final products. All costs that have been incurredby the production process up until that point—both direct and overhead—mustsomehow be allocated to the products that result from the split-off point. Any costsincurred thereafter can be charged to specific products in the normal manner. Thus,a product that comes out of such a process will be composed of allocated costs from1Adapted with permission from Chapter 15 of Bragg, Cost Accounting: A ComprehensiveGuide, John Wiley & Sons, 2001. 141142 / Inventory Accountingbefore the split-off point and costs that can be directly traced to it, which occurafter the split-off point. A related term is the by-product, which is one or more additional products thatarise from a production process, but whose potential sales value is much smallerthan that of the principal joint products that arise from the same process. As we willsee, the accounting for by-products can be somewhat different. A complication to the joint cost concept is that there can be more than one split-off point. As noted in Exhibit 10-1, we see the processing in a slaughterhouse, wherethe viscera are removed early in the process, creating a by-product. This is the firstsplit-off point. Then the ribs are split away from the carcass, which is a second split-off point. The ribs may in turn be packaged and sold off at once, or processed fur-ther to produce additional products, such as prepackaged barbequed ribs. In thisinstance, some costs incurred through the first split-off point may be assigned tothe by-product viscera (more on that later), while costs incurred between the firstand second split-off points will no longer be assigned to the viscera, but must inturn be assigned to the remaining products that can be extracted from the carcass.Finally, costs that must be incurred to convert ribs into final products will be as-signed directly to those products. This is the basic cost flow for joint products andby-products. 10-3 The Reasoning Behind Joint and By-product CostingAs we will see in the next section, the allocation of costs to products at the split-off point is essentially arbitrary in nature. Although two standard methods are used,neither one leads to information that is useful for management decision making.Why, then, must the inventory accountant be concerned with the proper cost alloca-tion methodology for joint products and by-products? Exhibit 10-1 Multiple Split-Off Points for Joint Products and By-products Additional Processing Flavored Rib Split-off Point Products Ribs Remainder Full Carcass of Carcass Viscera Split-Off Point ...