In the Relative Sales Value Method, Joint Costs Are Allocated

question 108

Multiple Choice

In the relative sales value method, joint costs are allocated between products:

• A) in proportion to their sales value at split-off point.
• B) in proportion to their profit margin at split-off point.
• C) in proportion to the separable costs at split-off point.
• D) in proportion to cost of production of a joint product.

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Definitions:

Outstanding Shares

The total number of shares of a company's stock currently held by all its shareholders, including share blocks and restricted shares.

Issued Shares

The total number of shares that have been sold to and are held by shareholders.

Paid-In Capital

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares plus any amount paid in excess.

Par Value

A nominal value assigned to a share of stock in the corporation's charter, serving as the minimum price at which shares can be issued.