Falco Industries may want to use the net realizable value method of allocating joint costs because it manufactures many products that are processed further after the split-off point and will be sold for a much higher price after the additional processing.

Question

Quizplus · Accepted Answer

The net realizable value method allocates joint costs based on the final sales value minus any additional processing costs after the split-off point, making it suitable for situations where products undergo further processing and are sold at significantly higher prices.

Falco Industries May Want to Use the Net Realizable Value