Approximated Net Realizable Value at Split-Off for Joint Products Is

question 13

Multiple Choice

Approximated net realizable value at split-off for joint products is computed as

• A)selling price at split-off minus further processing and disposal costs.
• B)final selling price minus further processing and disposal costs.
• C)selling price at split-off minus allocated joint processing costs.
• D)final selling price minus a normal profit margin.

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, based on estimated costs and activity levels.

Machine-Hours

A measure of the amount of time machines are used in the production process, often related to allocating manufacturing overhead costs.

Manufacturing Overhead

All the costs related to manufacturing that are not direct materials or direct labor expenses.