Product C is one of several joint products that come out of Department M. The joint costs incurred in Department M total $40,000. Product C can be sold at split-off or processed further and sold as a higher quality item. The decision to process further should be based on the:
A) Assumption that the $40,000 is irrelevant.
B) Allocation of the $40,000, using the net realizable value.
C) Allocation of the $40,000, using a physical measures approach.
D) Allocation of the $40,000, using the relative sales value at split-off method.

Question

Quizplus · Accepted Answer

The Answer of Product C is one of several joint products that come out of Department M. The joint costs incurred in Department M total $40,000. Product C can be sold at split-off or processed further and sold as a higher quality item. The decision to process further should be based on the:
A) Assumption that the $40,000 is irrelevant.
B) Allocation of the $40,000, using the net realizable value.
C) Allocation of the $40,000, using a physical measures approach.
D) Allocation of the $40,000, using the relative sales value at split-off method.

Product C Is One of Several Joint Products That Come