RKH Corporation produces three joint products. During a recent accounting period, joint costs totalled $365 and RKH had no beginning inventories. Additional data appear below: $\begin{array}{lrrr}
& \underline{\text { M1 }}& \underline{ \text { M2 } }& \underline{\text { M 3}}\
\text { Volume (kilograms) } & 150 & 50 & 300\
\text { Sales value at the split-off point } & \$ 375 & \$ 155 & \$ 600 \
\text { Sales value after further processing } & \$ 450 & \$ 200 & \$ 900 \
\text { Separable costs } & \$ 50 & \$ 35 & \$ 100
\end{array}$ Which of the following methods will result in the greatest joint cost allocation to M1?
A) Physical output
B) Sales value at split-off point
C) Net realizable value
D) Constant gross margin NRV

Question

Quizplus · Accepted Answer

The sales value at the split-off point method will result in the greatest joint cost allocation to M1 because M1 has the highest sales value at the split-off point compared to M2 and M3, leading to a higher allocation of the joint costs to M1 under this method.

RKH Corporation Produces Three Joint Products Which of the Following Methods Will Result in the Greatest