The net-realizable-value method is the least preferred cost allocation method since it does not consider the economic characteristics of the joint products.

Question

Quizplus · Accepted Answer

The net realizable value method is often used for allocating joint costs based on the final sales value minus separable costs of products, which does consider economic characteristics by focusing on the market or sales value of the joint products.

The Net-Realizable-Value Method Is the Least Preferred Cost Allocation Method