ECONOMICS

Detailed explanation-1: -Separable costs are any costs incurred after the split-off point in a production process that can be assigned to specific products. The price at which one of these products is sold should never be below the amount of separable costs incurred, since this would result in a loss.

Detailed explanation-2: -Separable costs are incurred beyond the splitoff point that are assignable to each of the specific products identified at the splitoff point. Separable costs include manufacturing costs only. The focus of joint costing is assigning costs to individual products as assembly occurs.

Detailed explanation-3: -(b) The term “separable costs, ” as applied to any project purpose, means the difference between the capital cost of the entire multiple-purpose project and the capital cost of the project with the purpose omitted.

Detailed explanation-4: -A split-off point is the location in a production process where jointly manufactured products are henceforth manufactured separately; thus, their costs can be identified individually after the split-off point. Prior to the split-off point, production costs are allocated to jointly manufactured products.

Detailed explanation-5: -There is a point of separation known as a split-off point, from which the goods are separated and recognized. At this point, the items are either sold immediately or processed further to produce a final product. The amount incurred up to the time of split-off point is referred to as joint cost.