How does the sales value at split-off method allocate joint costs?
A) allocates joint costs to joint products on the basis of the relative total sales value at the split-off point
B) allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
C) allocates joint costs to joint products on the basis of relative NRV
D) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage

Question

Quizplus · Accepted Answer

The sales value at split-off method allocates joint costs based on the relative total sales value of each joint product at the split-off point. This method assumes that the sales value of a product is a good indicator of the value that the product adds to the overall production process, and therefore, the costs should be allocated in proportion to the sales value of each product.

How Does the Sales Value at Split-Off Method Allocate Joint