In joint costing,which of the following is a market-based approach to allocating costs?
A) sales units
B) units of production
C) physical measures
D) net realizable value

Question

Quizplus · Accepted Answer

Net realizable value is a market-based approach that allocates joint costs based on the relative sales value of each joint product. This method takes into account the final selling price of the product and the costs involved in bringing it to market, making it a more accurate reflection of market conditions than physical measures or units of production. Sales units, while related to market demand, do not explicitly consider the costs of production and may not accurately reflect the value of each joint product.

In Joint Costing,which of the Following Is a Market-Based Approach