I need 1 response to each student discussion board post. Please keep separate and in order. each post should be at least 150 words each with references Turnitin is being used to check for plagiarism and Please use APA format. 300 words total
Collapse Subdiscussion Brandy Havens Brandy Havens
XXXXXXXXXX:04am Apr 11 at 10:04am
Hi Marcus. Thanks so much for getting our discussion off to such a great start! The relative sales value (RSV) is a sound choice! Under this approach, we allocate costs based on the estimated market value or sales value at the point of split-off.
In the link below, they actually walk us through an example of using the RSV method to allocate costs:
http://smallbusiness.chron.com/calculate-joint-costs-using-relative-sales-value-method-13054.html(Links to an external site.)Links to an external site.
what are your thoughts on this example?
Kaylyn Jones
XXXXXXXXXXYesterday Apr 10 at 10:53pm XXXXXXXXXXThere are three different methods that are used to allocate joint costs. The first one is the physical units, or quantity of what’s being sold, adding one price regardless of its actual value. This can relate to this such as gallons of gas, milk, juice, etc. Even if a gallon of gas is only worth (hypothetically) fifty cents per gallon, than the physical units of gas being sold at $2.50 would not decrease just because the value is less than the selling price. The advantage of this is the price does not change and when it does, it’s all the way across the board. A disadvantage would be that the price is the same no matter where the consumer goes. The second is using the relative sales value during the split off, it will divide the cost amongst all the products. So with the gasoline being sold would spread the joint costs to all the gasoline’s joint costs. The advantage of the relative sales value method is that the joint costs are split evenly through the products. By doing this, prices are able to fluctuate more. A disadvantage to this would be if the price is too low, than it would be harder to pay that portion. The last method is the net realizable value. The net realizable value is the finished products final selling price. After all costs are joined and divided where they need to be, the product than has a sticker price. An advantage of net realizable value is the exposure of the final price after everything is said and done, the price is set. This helps make it easier for consumers to determine their budget for that item. A disadvantage of Themis method would be having that set price after taking everything out could make it harder to fluctuate the pricing. I personally recommend the relative sales value method because there seems to be more fluctuation in the final price. With everything being taken out, it makes it up to the business to determine the price.
References
Crosson, S XXXXXXXXXXPVA ABC JIT – 4 ABC example [Video File]. Retrieved from http://www.youtube.com/watch?v=eyH4l3VvOCU
Schneider, A XXXXXXXXXXManagerial Accounting: Decision making for the service and manufacturing sectors(2nd ed.) [Electronic version]. Retrieved from https://content.ashford.edu/
Rubrics/Marking Guidelines :
I need 1 responses to each student discussion board post. Please keep separate and in order. each post should be at least 150 words each with references Turnitin is being used to check for plagiarism and Please use APA format. 300 words total