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Almost all manufacturers incur joint costs at some level the manufacturing process. [2] It can also be defined as the cost to operate joint-product processes including the disposal of waste. [3] With regard to joint costs, it is essential to allocate the joint cost for the different joint products for determining individual product costs.
In microeconomics, joint product pricing is the firm's problem of choosing prices for joint products, which are two or more products produced from the same process or operation, each considered to be of value. Pricing for joint products is more complex than pricing for a single product. To begin with, there are two demand curves.
In economics, joint product is a product that results jointly with other products from processing a common input; this common process is also called joint production. [1] A joint product can be the output of a process with fixed or variable proportions.
A split-off point is the point of production at which joint products appear in the production process. [1]For example, when a company was preparing its financial statements, it realized that because it showed no profit or loss, it was unattractive to investors.
In either case, once overhead/burden is added, the total cost for the job can be determined. If the accountant is using a general ledger accounting system, which lacks true job costing functionality, the costs must be manually transferred out of Work in Process to Finished Goods (Cost of Goods Sold for service industries). Of course, in the ...
It is more common to have price fixing trends during the bidding process, such as: If the bid or quoted price is much higher than expected, the reason may be collusive to set the price or just overpriced, but it is legal in itself. If all suppliers choose to increase prices at the same time, it is beyond the scope of input cost changes.
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In economics, average cost (AC) or unit cost is equal to total cost (TC) divided by the number of units of a good produced (the output Q): A C = T C Q . {\displaystyle AC={\frac {TC}{Q}}.} Average cost is an important factor in determining how businesses will choose to price their products.