Which of the following statements is true?
A) Joint costs are allocated to both main products and by-products
B) Joint costs are allocated only to by-products
C) Joint costs are not allocated because they cannot be attributed to specific units of output
D) Joint costs are allocated only to main products

Question

Quizplus · Accepted Answer

Joint costs are allocated only to main products because these costs are incurred up to the split-off point where main products are identifiable. By-products, which are incidental to the main products, typically do not have joint costs allocated to them; instead, any revenues from by-products may be treated as a reduction of the joint costs.

Which of the Following Statements Is True