Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 7 February 1991
Length: 15 pages
Data source: Field research
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Abstract
For the first time, the Commonwealth Blood Transfusion Service (CBTS) has to determine product costs for the output of its plasma fractionation center. The motivation for determining product costs is political in nature. Therefore, the CBTS has to find a way to report individual product costs despite the fact that they are joint products. Because of the political motivation, CBTS executives cannot argue that there is no meaningful way to allocate joint costs to products. The case provides students with an opportunity to identify several allocation procedures for determining joint costs and then use those procedures to determine product costs.
Location:
Industry:
Size:
Small, USD30 million revenues
Other setting(s):
1990
About
Abstract
For the first time, the Commonwealth Blood Transfusion Service (CBTS) has to determine product costs for the output of its plasma fractionation center. The motivation for determining product costs is political in nature. Therefore, the CBTS has to find a way to report individual product costs despite the fact that they are joint products. Because of the political motivation, CBTS executives cannot argue that there is no meaningful way to allocate joint costs to products. The case provides students with an opportunity to identify several allocation procedures for determining joint costs and then use those procedures to determine product costs.
Settings
Location:
Industry:
Size:
Small, USD30 million revenues
Other setting(s):
1990