Which Method of Allocating Joint Costs Is Based on the Proportional

question 6

Multiple Choice

Which method of allocating joint costs is based on the proportional sales values at the split-off point?

• A)Proportional method
• B)Physical quantities method
• C)Relative sales value method
• D)Joint allocation method

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Definitions:

Normal Absorption Costing

A method of product costing that assigns all manufacturing costs to products, including both variable and fixed overhead, based on a normal level of operation.

Budgeted Rate

A predetermined rate used in budgeting to estimate costs or revenues for a specific activity or product.

Work in Process

Inventory that includes materials that have been partially processed but are not yet finished goods.

Overhead Costs

Indirect expenses related to the day-to-day running of a business, not directly tied to specific product or service production.