A method for allocating joint-process costs is based on
A)opportunity costs.
B)outlay costs.
C)indirect costs.
D)physical measures.

Question

Quizplus · Accepted Answer

A method for allocating joint-process costs based on physical measures measures the amount or quantity of output produced from each joint process. This method is suitable for products that have a measurable unit of output, such as gallons of gasoline produced or pounds of meat butchered. It is more objective and practical than using subjective measures such as opportunity costs or indirect costs. Outlay costs are not a suitable basis for allocating joint-process costs as they do not reflect the actual resource usage involved in the joint process.

A Method for Allocating Joint-Process Costs Is Based on