Which One of the Following Methods of Allocating Joint Costs

question 87

Multiple Choice

Which one of the following methods of allocating joint costs allocates joint costs to joint products on the basis of estimated sales values at the split-off point?

• A)Net realizable value method.
• B)Physical measure method.
• C)Average cost method.
• D)Net sales value method.
• E)Sales value at split-off method.

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Definitions:

Straight-Line Method

A depreciation method where an equal amount of depreciation is charged for each year of the asset's useful life.

Annual Depreciation

The amount of expense allocated during a year to account for the reduction in value of a fixed asset over its useful life.

Salvage Value

The presumed end value of an asset following the completion of its useful life.

Straight-Line Method

A depreciation method that allocates an equal portion of the initial cost of an asset to each accounting period over its useful life.