For purposes of allocating joint costs to joint products, the estimated net realizable value at split-off is equal to:
A) Final sales price reduced by cost to complete after split-off.
B) Sales price less a normal profit margin at the point of sale.
C) Separable product cost plus a normal profit margin.
D) Total sales value less joint costs at point of split-off.

Question

Quizplus · Accepted Answer

The estimated net realizable value at split-off is calculated as the final sales price reduced by the cost to complete after split-off. This method allocates joint costs based on the potential revenue each product can generate after accounting for additional processing costs.

For Purposes of Allocating Joint Costs to Joint Products, the Estimated