Joint costs are
A)separable.
B)allocated on the basis of cause and effect relationships.
C)allocated arbitrarily.
D)all of the above.

Question

Quizplus · Accepted Answer

Joint costs are costs incurred in producing two or more joint products, but which cannot be traced to a specific product. As there are no cause-and-effect relationships to allocate these costs, they are allocated arbitrarily. Joint costs are not separable because they cannot be divided without changing the nature of the product. Therefore, the correct answer is C, allocated arbitrarily.

Joint Costs Are