The Physical Output Method of Joint Product Cost Allocation

question 8

Multiple Choice

The physical output method of joint product cost allocation

• A) is useful for all product costing
• B) is rarely used
• C) is useful only when the output for all main products can be expressed in the same physical measure
• D) is useful when products have similar net realisable values

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Definitions:

Isocost Line

A graph that shows all combinations of inputs that cost the same total amount for a firm.

Optimal Combination

The most efficient allocation or selection of resources and inputs to maximize output or satisfaction.

Isoquant

A curve that shows all the combinations of inputs that produce the same level of output, used in the study of production theory.

Isocost Line

A graph representing all combinations of a firm's inputs that result in the same total cost.