What are joint costs? How do they affect the sell or process further decision?

Q: Are allocated joint processing costs relevant when making a decision to sell a joint product at the…

A: Definition: Joint production process: A joint production process results in two or more products,…

Q: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: What is the difference between price and cost? Is there any relation connected them? Which one is…

A: PRICE  1. Price is what you pay for purchasing goods or availing the services. Also called sale…

Q: Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision. What…

A: Joint costs are the costs which are incurred jointly in the production process for two or more…

Q: What is a transfer price? What are the three main approaches to setting transfer prices?

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: “Sunk costs are considered by a manufacturer in decision making”. Do you agree? Explain.

A: "Sunk costs are considered by a manufacturer in decision making”. I do not agree with this…

Q: Of the various methods used to allocate joint costs, which makes the most sense to you?

A: In accounting a joint cost is referred to as that cost that is related to more than one product.…

Q: Can a company use a target pricing model without a follow-on cost-savings sharing agreement? Why or…

A: Target price is the price at which the stock future price is estimated grounded on earnings…

Q: How is standalone selling price defined?

A: Performance Obligation: Performance obligation refers to the obligation that the seller to provide…

Q: How do managers decide whether a cost is avariable or a fixed cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: What do you understand by rate of markup on cost and rate of markup on selling price, illustrate…

A: Answer: Mark-up is nothing but the difference between a good or service’s selling price and its…

Q: What guideline should be used in determining whether a joint product should be sold at the split-off…

A: Joint costing is the method of costing used to determine costs for products which are processed in a…

Q: Define the term make-or-buy (or outsourcing) analysis?

A: Make or buy: purchasing of goods from the outside vendors is called outsourcing.

Q: What is the decision rule for selling a product as is or processing it further?

A: Definition:   Differential analysis: Differential analysis refers to the analysis of differential…

Q: “Relevant costs for pricing decisions are full costs of the product.” Do you agree? Explain.

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: Define the term “opportunity cost.” How may this cost be relevant in a make-or-buy decision?

A: Cost is defined as the total amount of money spent by the company for the production or creation of…

Q: What are the various levels of aggregation to which the lower of cost and net realizable value rule…

A: LCNRV (Lower of Cost or Net Realizable Value) approach: It is an approach that compares the cost of…

Q: Calculate the lowest acceptable transfer price for the seller (Division A) ?

A: Calculation of contribution per unit of Division A Particulars Amount Selling price per unit 76…

Q: Which of the following methods allocates joint costs based on the potential market value at the…

A: Joint cost represents the cost incurred by the business in a joint process. In such process, single…

Q: “Managers should consider only additional revenues and separable costs when making decisions about…

A: Split off point: Split-off point is the point in production process where joint products are capable…

Q: Which of the following costs are irrelevant to business decisions? Avoidable costs Costs that…

A: Sunk costs are irrelevant to business decisions.

Q: Which of the following transfer price approaches is used when the transfer price is set at the…

A: Transfer Price  : Price at which related parties transact with each other is known as transfer…

Q: Give an example on the Sell or process further and solve it

A: Sell or process further is a Managerial decision taken by considering factors like cost, sales…

Q: What is the perform

A: one of the objectives of transfer pricing is to performance evaluation and improve the same . fair…

Q: Explain how negotiation between the supplying and buying units may be used to set transfer prices.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: How does capacity affect transfer pricing decisions?

A:

Q: What are Joint Costs?

A: The entity incurs different types of costs while carrying out its day-to-day operations. When a…

Q: Why is there often a conflict between the performance evaluation and cost-minimization objectives of…

A: SOLUTION- TRANSFER PRICING   IS THE ACCOUNTING PRACTICE THAT REPRESENTS THE PRICE THAT ONE DIVISION…

Q: Why is it essential to determine unit costs or profits?

A: Determining unit cost means to find out total cost incurred on a particular unit It is determined by…

Q: Whats the difference between prime and conversion costs?

A: Prime cost: It is the cost which is incurred for manufacturing a product. It includes direct…

Q: A cost - based transfer price considers the cost of producing the goods when determining the price.…

A: At the time of determining the prices of the goods, the cost of goods-producing is required to be…

Q: What should be considered when deciding whether a joint product should be sold at the split-off…

A: .Joint products are two or more products that are generated with a single production process. They…

Q: a) Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision.

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: When is it more appropriate to use market-based transfer price rather than cost-based transfer…

A: Transfer pricing:- Its the price at which one unit of a company sells goods to its another unit.…

Q: Explain why using cost as a transfer price is inappropri-ate when the center producing the product…

A: Profit Center: A profit center may be a part of a business that is expected to form an identifiable…