Proper joint cost allocations for inventory costing and cost-of-goods-sold computations are important because
A) inventory costing is essential for proper balance sheet presentation.
B) divisional profitability may affect compensation for divisional managers.
C) cost of goods sold is an important component in the determination of net income.
D) the information may be required for insurance settlement or litigation.
E) All of the above are correct.

Question

Quizplus · Accepted Answer

Proper joint cost allocations are important for accurate financial reporting, managerial decision-making, and legal or insurance purposes, making all the options relevant.

Proper Joint Cost Allocations for Inventory Costing and Cost-Of-Goods-Sold Computations