Which of the methods of allocating joint costs usually is considered the simplest to implement?
A)estimated net realizable value
B)constant gross-margin percentage NRV
C)sales value at splitoff
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

Sales value at splitoff is considered the simplest method to implement because it only requires the total sales value at the point of splitoff to be divided among the joint products based on their relative sales value, without any further calculations or estimations. In contrast, the estimated net realizable value and constant gross-margin percentage NRV methods involve additional calculations or assumptions about future costs, revenues, and profit margins, which may be subjective or difficult to estimate accurately. Therefore, the sales value at splitoff method is preferred for its simplicity and objectivity.

Which of the Methods of Allocating Joint Costs Usually Is