Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products?
A) A high individual product value results in a high level of joint costs.
B) A low individual product value results in a low level of joint costs.
C) A high individual product value results in a low level of joint costs.
D) The cause-and-effect relationship depends on the relative costs to be incurred after split off.
E) There is no cause-and-effect relationship.

Question

Quizplus · Accepted Answer

Joint costs are incurred before the split-off point and are allocated to individual products based on some method, but there is no direct cause-and-effect relationship between the joint costs and the value of individual products.

Which of the Following Statements Is True in Regard to the Cause-And-Effect