The estimated net realizable value method allocates joint costs on the basis of the expected final sales value in the ordinary course of business, less the expected separable costs of production and marketing of the total production for the period.

Question

Quizplus · Accepted Answer

The statement is true. The estimated net realizable value method is a commonly used method of allocating joint costs. It involves estimating the final sales value of the joint products and subtracting the expected separable costs of production and marketing to determine the net realizable value. This value is then used to allocate the joint costs among the various products.

The Estimated Net Realizable Value Method Allocates Joint Costs on the Basis