When allocating joint costs, Grimsby Company calculates the final sales value of the various products manufactured and subtracts appropriate separable costs. The company is using the:
A)gross margin at split-off method.
B)reciprocal-accounting method.
C)relative-sales-value method.
D)physical-units method.
E)net-realizable-value method.

Question

Quizplus · Accepted Answer

The net-realizable-value method allocates joint costs based on the final sales value minus separable costs.

When Allocating Joint Costs, Grimsby Company Calculates the Final Sales