Which of the following is not an acceptable method for accounting for by-products in a joint manufacturing process?
A)Costs before the split-off point are allocated to by-products.
B)The estimated sales value of the by-product reduces the cost of the main product.
C)The value of by-products is included in an account called "By-products Inventory."
D)In some instances,the revenue from selling by-products may be treated as "other income" on the income statement.

Question

Quizplus · Accepted Answer

Costs before the split-off point should not be allocated to by-products as they are not yet separate products at that point. By-products are only considered separate products after the split-off point. Therefore, allocating costs before the split-off point to by-products is not an acceptable method of accounting for by-products in a joint manufacturing process.

Which of the Following Is Not an Acceptable Method for Accounting