In regard to joint cost allocation, the "split-off point" is:
A) Not acceptable when using the value basis for allocating joint costs.
B) The point at which some products are sold and some remain in inventory.
C) The point at which separate products can be identified.
D) A physical basis method to allocate costs based on ratio of some physical characteristic.
E) The difference between the actual and market value of joint costs.

Question

Quizplus · Accepted Answer

The split-off point is the point in the production process where joint products can be recognized as separate products. At this point, joint costs must be allocated to each product based on its individual value. Therefore, choice C is the correct answer. Choice A is incorrect because the value basis method can be used to allocate joint costs. Choice B is incorrect because the split-off point is not related to selling or inventory decisions. Choice D is incorrect because it refers to a physical measure, which is not necessarily a valid basis for joint cost allocation. Choice E is incorrect because it does not relate to the split-off point.

In Regard to Joint Cost Allocation, the "Split-Off Point" Is