For Each of the Following Methods of Allocating Joint Costs

question 91

Essay

For each of the following methods of allocating joint costs, give a positive or a negative aspect of selecting each one to allocate joint costs.
a.sales value at split-off
b.estimated net realizable value method
c.the constant gross margin method
d.a physical measure such as volume

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Definitions:

Adams' Theory

Refers to Equity Theory, proposed by J. Stacy Adams, which suggests that individuals are motivated by fairness in their work relationships and will adjust their input to maintain equity.

Restoring Equity

The process of attempting to balance perceived disparities in fairness or distribution of resources within social or organizational contexts.

Eustress

Positive stress that can motivate individuals, leading to improved performance and well-being.

Negative Response

An adverse reaction or answer to a stimulus, situation, or question, often reflecting disapproval or dissatisfaction.