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

Question

Quizplus · Accepted Answer

The split-off point is the point in the production process where joint products can be identified and sold separately. This is necessary for allocating joint costs among the different products. Option A refers to a physical allocation method, option B refers to a valuation method, option C describes how products are treated after the split-off point, and option E is incorrect as the value basis can be used with the split-off point method.

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