When two products are produced during a common process,what is the factor that determines whether the products are joint products or one principal product and a by-product?
A)Potential marketability for each product
B)Amount of additional work expended in the production of each product
C)Management policy
D)Relative total sales value

Question

Quizplus · Accepted Answer

The factor that determines whether the products are joint products or one principal product and a by-product is the relative total sales value. If the total sales value of both products is significant and comparable, they are considered joint products. If one product has a significantly higher total sales value compared to the other, it is considered the principal product and the other is a by-product. Factors like potential marketability and management policy may influence the decision but the main determining factor is the relative total sales value. The amount of additional work expended in the production of each product is not relevant in this decision.

When Two Products Are Produced During a Common Process,what Is