Which of the following joint cost allocation methods should be used for decision-making?
I. Physical output method
II. Net realizable value method
III. Sales value at split-off point method
A) I only
B) II and III only
C) I, II, and III only
D) None of the above; they should not be used for decision-making

Question

Quizplus · Accepted Answer

Joint cost allocation methods, including physical output, net realizable value, and sales value at split-off point, are used for inventory valuation and profit measurement, not for decision-making. Decision-making should be based on incremental analysis, focusing on relevant costs and benefits that change between alternatives.

Which of the Following Joint Cost Allocation Methods Should Be