For the purposes of allocating joint costs to joint products, the sales price at the point of sale, reduced by the cost to complete after split-off, is assumed to be equal to the: (CPA adapted)
A) Total costs.
B) Joint costs.
C) Sales price less a normal profit margin at point of sale.
D) Net realizable value at split-off.

Question

Quizplus · Accepted Answer

The net realizable value at split-off is calculated by taking the sales price at the point of sale and reducing it by the cost to complete after split-off. This method is used to allocate joint costs to joint products.

For the Purposes of Allocating Joint Costs to Joint Products