Joint Product Cost

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Joint Product Cost

In accounting, the cost of two or more products derived from the same source. For example, natural gas and oil from the same well share joint product costs. Because it is impossible to distinguish which product caused a particular cost, joint product costs are distributed according to the expected sale price of each product.
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The following are among the items that must be identified in a cost analysis of DE: activities to be costed; resources used; direct and overhead costs; joint product costs; annualized capital costs; and cost drivers.

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