Which of the Following Is the Most Important Reason to Allocate

question 8

Multiple Choice

Which of the following is the most important reason to allocate joint costs?

• A) Accurate product costs are necessary to make product mix decisions
• B) Accurate product costs are necessary to make product pricing decisions
• C) Production costs must be allocated to inventory and cost of goods sold for financial statement and tax reporting reasons
• D) None of the above - joint cost allocation is arbitrary

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