The Estimated Net Realizable Method Allocates Joint Costs on the Basis

question 143

Multiple Choice

The estimated net realizable method allocates joint costs on the basis of

• A)expected final sales value less separable costs of production and marketing.
• B)value added after the splitoff point.
• C)sales value less value added after the splitoff point.
• D)revenue less all direct manufacturing costs after splitoff point.
• E)relative numbers of physical units of each product.

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Definitions:

Bond Rating

An assessment of the credit quality of a bond, generally given by a rating agency.

Specific Assets

Assets that are designated for a particular use or are unique to a business's operation.

Risk

The possibility of losing some or all of an investment, or the uncertainty surrounding the return on an investment.

Convertible Bonds

Debt securities issued by a corporation that can be converted into a specified number of shares of the issuing company's stock.