None of the four common methods for allocating joint costs will consistently allocate joint costs more accurately than another.

Question

Quizplus · Accepted Answer

All four common methods (physical measures method, sales value at split-off method, net realizable value method, and constant gross margin percentage NRV method) are based on different assumptions and allocation bases, and none is inherently more accurate than the others in all situations. The choice of method often depends on the nature of the joint products and the information needs of management.

None of the Four Common Methods for Allocating Joint Costs