Which of the Following Methods Allocates Joint Production Costs Based

question 117

Multiple Choice

Which of the following methods allocates joint production costs based on the kilograms of product produced?

• A)sales-value-at-split-off method
• B)constant gross margin percentage method
• C)physical units method
• D)replacement cost method

---

Definitions:

Unavoidable Costs

Costs that cannot be eliminated, reduced, or postponed, and must be incurred regardless of specific business decisions or changes in operations.

Present Value Method

A technique used to determine the present value of future cash flows or income streams to evaluate investment projects or financial products.

Net Market Value

The amount that could be obtained from selling an asset in the market after deducting any selling costs or liabilities.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe the existing state, a future outcome, or more than one possible outcome.