Joint Cost Analysis as an AId to Management-a Further Note.

Abstract The article presents a rejoinder to a discussion on a previous article written by the author on the topic, joint cost analysis as an aid to management. The author believes that if the assumption that each dollar is equally profitable is to be true at all times, then the total cost of a joint product must, proportionately, never exceed the total cost of any other joint product, individual sales values being the basis for comparison. In this case the total cost of product A is calculated via the sales value method, as being 2, 400, 000. This figure is certainly proportional to the respective sales values, but it is not a true total, the separate processing costs of A alone amount to 2, 800, 000. This refute the suggestion that each dollar invested is equally profitable. The author also argues, that it is impossible to arrive at an individual profit, because each of a series of joint products is based upon the fact that a joint cost is an expenditure incurred in the production of a series of products, all of which must be processed or none.