Consider the Following Statement: Each Product Is Assigned a Weighting

question 45

Multiple Choice

Consider the following statement: Each product is assigned a weighting factor that is multiplied by the number of units.Joint cost is prorated to the products on the basis of each product's share of total weighted units.Which joint cost allocation method does the statement describe?

• A)physical units method
• B)weighted average method
• C)sales-value-at-split-off method
• D)net realizable value method

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Definitions:

Agriculture

The practice of cultivating the land, producing crops, and raising livestock for human consumption and use.

Allocatively Efficient

Allocative efficiency occurs when resources are distributed in a way that maximizes the net benefit to society.

Productively Efficient

Refers to a situation where an economy or firm produces goods at the lowest possible cost per unit, utilizing resources in the best way possible.

Product Differentiation

Product differentiation is the process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.