If a company produces two products, A and B, from a joint process, and B requires additional processing after the split-off in order to be salable, how is the joint cost allocated to B determined?
A)The costs of the additional processing are ignored in allocating joint costs.
B)The costs of the additional processing are subtracted from the joint costs allocated to B.
C)The relative sales value used to allocate the joint cost are determined after the costs of further processing are subtracted from the ultimate sales value of B.
D)None of these are correct.

Question

Quizplus · Accepted Answer

The relative sales value used to determine joint costs is determined by subtracting the costs of further processing from the ultimate sales value of B.

If a Company Produces Two Products, a and B, from a Joint