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) There is no cause-and-effect relationship.

Question

Quizplus · Accepted Answer

There is no direct cause-and-effect relationship between allocated joint costs and individual products since joint costs are incurred together for multiple products. The allocation of joint costs is based on a chosen allocation method and is not influenced by the individual product value.

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