Apportionment of joint costs

Joint product costs occur in many industries such
as : petroleum, oil refinery, meat-making, textiles, dairy, flour mill, saw mill and many
other process industries and top management of business concerns require the
Accountants to give their opinion for many managerial decisions such as to processfurther or to sell at split-off stage. To answer this question they require apportionment of
joint costs over different products produced.
The main problem faced in the case of joint products/by-products is the apportionment of the
total cost incurred upto the point of separation of joint products/or by products. For costs
incurred after the split off point there is no problem, as these costs can be directly allocated to
individual joint products or by-products. Thus the apportionment of joint costs over different
products produced involve the following two cases.