The net realizable value method ________.
A) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point
B) allocates joint costs to joint products on the basis of the relative sales value at the splitoff 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 method allocates joint costs to joint products on the basis of relative NRV, which is the sales value of the product minus further costs necessary to make the product ready for sale. This method is useful when joint products have different sales values or further costs to reach the final stage of production.

The Net Realizable Value Method ________