The methodology(ies)of allocating joint-process costs is(are)based on
A)net realizable value,only.
B)physical measures,only.
C)both net realizable value and physical measures.
D)None of the answers is correct.

Question

Quizplus · Accepted Answer

Both net realizable value and physical measures are used in allocating joint-process costs. Net realizable value considers the estimated selling price less any additional costs necessary to make the product ready for sale, whereas physical measures focus on measuring the output of each product. Combining these methods provides a more accurate allocation of joint-process costs. Therefore, option C is the best choice. Option A is incorrect because it only considers net realizable value, whereas option B is incorrect because it only considers physical measures. Option D is incorrect because there are methods for allocating joint-process costs.

The Methodology(ies)of Allocating Joint-Process Costs Is(are)based on