How Does the Net Realizable Value Method Allocate Joint Costs

question 131

Multiple Choice

How does the net realizable value method allocate joint costs?

• A) allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
• B) allocates joint costs to joint products on the basis of the relative sales value at the split-off point
• C) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
• D) allocates joint costs to joint products on the basis of relative NRV

---

Definitions:

Natural Selection

A fundamental mechanism of evolution where organisms better adapted to their environment tend to survive and produce more offspring.

Homologous Traits

Traits shared by two or more species that were inherited from a common ancestor.

Drug Resistance

The reduction in effectiveness of a medication such as an antimicrobial or an antineoplastic in curing a disease or condition.

Virions

The complete, infective form of a virus outside a host cell, consisting of RNA or DNA within a protective protein coat.