Question

The joint product costing method that produces the same gross profit percentage for all products as known as: a. Split-off costing method: b. Market value method c. Actual costing method d. Physical measure method

Answer 1

Answer:

B. Market Value Method

Explanation:

First, it should be noted that Joint Product costing method allocates joint costs based on the the value of sales per time. Furthermore, Joint costs ratio to the value of sales remains the same for all the products that are evaluated based on the method. When we talk of value of sales, we are automatically referring to the value at which the market receives the product or buys the product so this is market value method.

The implication  of this, is that the gross profit percentage used for all the products undert this costing method will be the same. oint product costing method.

This costing method is usually employed by a business when maunfacturing process of the production process of goods is such that there is a stage where products are split off for different reasons. The production costs or manufacturing costs before the split of must be allocated threfore, a costing method (Joint Product Costing Method or Market Value Method) is assigned.