Allocated joint costs are useful for:
A) setting the selling price of a product.
B) determining whether to continue producing an item.
C) controlling user department costs.
D) determining inventory cost for accounting purposes.

Question

Quizplus · Accepted Answer

Allocated joint costs are used to assign costs to inventory for accounting purposes. This is important for determining the actual cost of a product and is necessary for financial reporting. While they may be used as a component of setting selling prices, controlling user department costs, and determining whether to continue producing an item, these are not the primary purposes of allocated joint costs.

Allocated Joint Costs Are Useful For