Use the following information for the next 2 questions.
A joint input costing $500 results in four distinct products at the point of split-off. Products J, K and L are main products, and product M is a by-product. Relevant data follows:
-If the revenue from product M is recognized at the time of sale, what amount will be recorded as the cost of product M inventory at the time of split-off?
A) $0
B) $10
C) $20
D) $30

Question

Use the following information for the next 2 questions.
A joint input costing $500 results in four distinct products at the point of split-off. Products J, K and L are main products, and product M is a by-product. Relevant data follows: 
-If the revenue from product M is recognized at the time of sale, what amount will be recorded as the cost of product M inventory at the time of split-off?
A) $0 
B) $10 
C) $20 
D) $30

Quizplus · Accepted Answer

At the time of split-off, the cost of product M inventory is not recorded separately as it is part of joint costs. The cost is allocated later when the product is sold or further processed.

Use the Following Information for the Next 2 Questions