Allocating joint costs and costs of byproducts allows managers to examine cost and profitability associated with each of the products they produce enabling them to establish goals related to product-mix. Your discussion topic this week focuses on joint costs and byproducts.

Please respond to all of the following prompts:

1. Give two examples of industries in which joint costs are found.

2. For each example, what are the individual products at the split-off point?

3. Why might managers seeking a monthly bonus based on attaining a target operating income prefer the sales method of accounting for byproducts rather than the production method?