The Net Realisable Value Method Allocates Joint Costs Using the Relative

question 139

True/False

The net realisable value method allocates joint costs using the relative value of main products, taking into account the additional sales value and costs incurred after joint production ends.

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Definitions:

Unit Variable Cost

The variable cost incurred to produce one unit of product, including direct materials, direct labor, and variable manufacturing overhead.

Monthly Sales

The total revenue generated from the sales of products or services within a month.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding income and expenses from unusual or non-operational activities.

Break-even Point

The level of production or sales at which total costs equal total revenues, resulting in no profit or loss.