What are Separable Costs?

Separable costs are any costs incurred after the split-off point in a production process that can be assigned to specific products. The split-off point is the location in a production process where a common input is split into separate products. Once the split-off point has been reached, any subsequent costs incurred, such as for product finishing, are classified as separable costs.

In accounting, the split-off point should be clearly defined, so that all separable costs incurred thereafter can be separately tracked and assigned to specific products.