Cost allocation, joint products and byproducts is a topic of concern for accountants, as your textbook noted in the opening vignette-related to Medicare and organ donations and the concepts in action related to chicken processing.
First, address this problem: An individual is experiencing severe neck and shoulder pain that can be treated by a massage therapist (relaxes and realigns muscles), which in turn helps alleviate the pain. The insurance company has an issue in that the procedure also feels good--many individuals will seek treatment because of the relaxation process. Would you consider this a joint cost allocation problem? Help the insurance company decide how to handle the situation. In addition, discuss a product that may have byproducts.