Which one of the following methods uses units of output to allocate joint costs to joint products?
A)Net realizable value method.
B)Physical units method.
C)Net sales value method.
D)Sales value at split-off method.
E)Activity-based costing.

Question

Quizplus · Accepted Answer

The physical units method allocates joint costs to joint products based on the number of physical units produced. This method assumes that each product receives an equal amount of joint costs per unit. It is commonly used in industries such as oil and gas, chemical and pharmaceuticals, where multiple products are produced from a single production process. The other methods listed are not based on units of output and have different allocation methods.

Which One of the Following Methods Uses Units of Output