The physical quantities method of allocating joint costs is often used when the output sales prices are highly volatile.

Question

Quizplus · Accepted Answer

The statement correctly describes the use of the physical quantities method for allocating joint costs in a situation where the sales prices are highly volatile and unreliable. In such cases, using physical values is considered more appropriate for allocating joint costs among the different products produced by a joint process.

The Physical Quantities Method of Allocating Joint Costs Is Often