Question

(a) Describe the FOUR (4) methods of allocating joint costs to products. (12 marks)

Answer 1

Answer:

[1] Market or sales value method:

• The market or sales value method allocates a joint production cost on the basis of relative market or sales values of individual joint products.

[2] Quantitative or physical unit method:

• This method uses some physical measurement units (such as volume, weight etc.) to allocate joint production cost.

[3] Average unit cost method:

• The average unit cost method, as the name implies, uses average unit cost to allocate the cost before split-off point.

[4] Weighted average method:

• This method assigns predetermined weight factors to joint products based on various factors such as price, production complexity and unit size of the product.

Answer 2

Answer:

Step-by-step explanation:

C