The method of allocating joint costs used when product prices are not set by the market (for example with heavily regulated companies)is called the
A)absolute quantities method.
B)physical qualities method.
C)physical quantities method.
D)regulation method.

Question

Quizplus · Accepted Answer

The method of allocating joint costs based on physical quantities is used when product prices are not set by the market. This method allocates joint costs to each joint product using their relative physical quantities. This is an appropriate method for heavily regulated companies where prices are not determined by the market forces.

The Method of Allocating Joint Costs Used When Product Prices