ECONOMICS

Detailed explanation-1: -What is a Split-Off Point? 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.

Detailed explanation-2: -A split-off point is the point of production at which joint products appear in the production process. 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.

Detailed explanation-3: -For example, when you drill for oil, you eventually separate the crude oil from the other materials you take out of the ground. Then you apply costs to each product to better compute a sale price and your profit. Accountants call this the splitoff point.

Detailed explanation-4: -Joint products become separate and identifiable at the split-off point.

Detailed explanation-5: -Joint costing or by-product costing are used when a business has a production process from which final products are split off during a later stage of production. The point at which the business can determine the final product is called the split-off point.