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Relevant costing

Further processing decisions

 Joint products arise where the manufacture of one product inevitably results
in the manufacture of other products.

 The specific point at which individual products become identifiable is known
as the split-off point.

 Costs incurred before the split-off point are called joint costs and must be
shared between joint products produced. Joint costs are common costs and
are therefore not relevant.

 After separation products may be sold immediately or may be processed
further. Any further processing costs are allocated directly to the product on
which they are incurred.

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