The preferred approach to allocate joint costs to products is the value basis, which allocates a joint cost in proportion to the

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jonny [76]

1 year ago

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The preferred approach to allocate joint costs to products is the value basis, which allocates a joint cost in proportion to the

sales value of the output produced by the process at the split-off point. true or false

Business

1 answer:

ddd [48] · Answer 1 · 2023-07-13T14:02:45+03:00

Allocation of joint costs in proportion to the value of the output of the sales which were produced in the process during at the split-off point is a preferred approach.

<h3>What are joint costs?</h3>

Joint costs involve the benefit of more than one product, and the separation of the costs of such products is impossible as the benefits related thereto are also joint.

One of the best examples of joint costs is in a condition when a cattle-owner feeds both the flock of sheep and cattle of cows at the same time. One cannot differentiate between the separate costs allocated.

Hence, it may be said that value basis is the most appropriate method for the purpose of allocation of joint costs being incurred in the proportion as it may be.

Learn more about joint costs here:

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