RKH Corporation Produces Three Joint Products

question 82

Multiple Choice

RKH Corporation produces three joint products. During a recent accounting period, joint costs totalled $365 and RKH had no beginning inventories. Additional data appear below: M1 M2 M3
Volume (kilograms) 150 50 300
Sales value at the split-off point $375 $155 $600
Sales value after further processing $450 $200 $900
Separable costs $50 $35 $100
Which of the following methods will result in the greatest joint cost allocation to M1?

• A)Physical output
• B)Sales value at split-off point
• C)Net realizable value
• D)Constant gross margin NRV

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Definitions:

Product Line Differentiation

The process of distinguishing a product line's items from each other and from competitors' products to appeal to different customer segments or needs.

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