The gross margin percentage of joint products using the net realizable value method will not exactly be equal due to further processing costs.

Question

Quizplus · Accepted Answer

The net realizable value method allocates joint costs based on the final net realizable value of each product minus any additional processing costs. Since these additional processing costs can vary among products, the gross margin percentage for each product will not be exactly equal.

The Gross Margin Percentage of Joint Products Using the Net