How does the net realizable value method allocate joint costs?
A) allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
B) allocates joint costs to joint products on the basis of the relative sales value at the split-off point
C) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
D) allocates joint costs to joint products on the basis of relative NRV

Question

Quizplus · Accepted Answer

The net realizable value (NRV) method allocates joint costs based on the relative net realizable value of each product, which is the estimated selling price minus any additional processing costs.

How Does the Net Realizable Value Method Allocate Joint Costs