Sell or Process Further Decision

This video shows how to decide whether to sell or process further a joint product. When deciding whether to sell or process a product further, a manager should determine whether the incremental revenue from further processing is greater than the incremental cost from further processing. If the incremental revenue exceeds the incremental cost, then the product should be processed further. Joint costs (costs incurred prior to the splitoff point) are NOT relevant when determining what to do after the splitoff point. Joint costs are only relevant in determining the profitability of the entire operation, so their allocation to joint products can often lead to suboptimal managerial decision-making.
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[@nhannguyenhaithanh6069]

It's still unreal, the quality of education I get from a small city in Vietnam. Thanks for your work.

[@Edspira]

It's my pleasure, I'm glad you're enjoying the videos. I hope you learn a lot and have a great career!

[@brendancleaver93]

Thank you so much for these videos! I have my Cost Accounting Final Exam tomorrow morning, and these videos have been a life saver! I've watched the 4 videos on joint-costing, and will be watching more videos tonight 🤣

[@sweetbananagirl85]

thank you!!! this is helping me tons in preparation for the cpa exam

[@Edspira]

Great! I hope you ace the exam and that this is the beginning of a great career. Best wishes

[@alexanderkuhn6126]

Thank you for your videos and outlining everything in an easy to understand way

[@lynn790]

Thank you so much for these vids. They really make the concepts clear!

[@sandesh1036]

You make things VERY clear. Thanks.

[@sintayehubekele4012]

Thank you so much for all the videos. you are so explanatory and brief while presenting cost issues. Thank you!! Keep up the good work!!!

[@april6757]

really really helpful and understanding a lot more! Hopefully can see more topics in managerial accounting.

[@gudaniprudence9472]

Thank you, this is so helpful

[@akshisaxena4961]

Your videos are really helpful, thank you!

[@irislabirb]

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[@shaan12313]

thanks a lot , really appreciate your hard work here.

[@Edspira]

+Shahid Shamim Thank you for saying that. I am happy that you found the video useful!

[@brightmind5345]

well .. when allocating the joint product cost proportionally 50/50% as the example the allocation cost of whole milk will exceed the selling value and when we do the further process to turn it whole milk into nonfat milk it will make a profit margin worth with 5,000. why we do not say that the further process will decrease the loss of this product rather than says that the joint costs are not relevant. great vid thanks Michael

[@nwarner22190]

Another great video, Thanks!

[@Infinity0709]

thank u sir, well expained !!!!!

[@grantkelly2612]

thank you so much

[@lalitpandey545]

Awesome

[@GoldsmithJohn]

what if incremental rev-incremental cost=0? would the company further process the product?

[@dylanswerdlow8593]

But how do you solve if you are not given the separation process cost?