RKH Corporation Produces Three Joint Products Which of the Following Methods Will Result in the Smallest

question 31

Multiple Choice

RKH Corporation produces three joint products. During a recent accounting period, joint costs totalled $365 and RKH had no beginning inventories. Additional data appear below: $\begin{array}{lrrr}& \underline{\text { M1 }}& \underline{ \text { M2 } }& \underline{\text { M 3}}\\\text { Volume (kilograms) } & 150 & 50 & 300\\\text { Sales value at the split-off point } & \$ 375 & \$ 155 & \$ 600 \\\text { Sales value after further processing } & \$ 450 & \$ 200 & \$ 900 \\\text { Separable costs } & \$ 50 & \$ 35 & \$ 100\end{array}$ Which of the following methods will result in the smallest joint cost allocation to M3?

• A) Net realizable value
• B) Sales value at split-off point
• C) Physical output
• D) Constant gross margin NRV

---

Definitions:

Chronic Wound

A wound that fails to heal in an orderly and timely manner, usually remaining open for an extended period and not responding to typical treatment.

Suture Removal

The act of removing stitches from a wound after it has adequately healed.

Staple Removal

The process of taking out surgical staples from a wound after it has sufficiently healed.

Steri-Strip

Thin, adhesive strips used to close small wounds or incisions, often used as an alternative to sutures or staples.