Replying to 'A Further Note' on Joint Cost Analysis.

Abstract The article presents the author's comments on the article on cost analysis by author Gerald H. Lawson, published in the July 1957 issue of The Accounting Review. The author challenges the assumption of Lawson of equal profitability of the various dollars invested in a joint product undertaking. Lawson stated that his objections are to accounting techniques, generally, which attempt to arrive at an individual cost and profit for each of a series of joint products. Nevertheless, such costing and eventual profit determinations are necessary where joint products are carried in year-end inventories in quantities not proportional to theft production. But the author claims that the technique can be used to disclose whether or not a joint cost situation actually exists. When the calculation shows a loss for one product, then the situation is not one that should be regarded as involving joint products, for more profit could result by devoting the same amount of investment to processing only the item not showing a loss.