Follow Show A. The selling price of a by-product. B. Whether one of the joint products should be discontinued. C. The variance between budgeted and actual common costs. D. The inventory cost of joint products for financial reporting. Accounting Cost Accounting CMA Question added by Deleted user Upvote (1) Views (5) Followers (2) Comments (2) Report Question Write an Answer
 by Mir Mujtaba Ali , Internal Audit Manager , Confidential Yes, the right answer is D Upvote (2) Downvote Reply (0) Report by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI
INTERNATIONAL TRADING EST. Answer option D >>>>>>>>>>>>>> The inventory cost of joint products for financial reporting. Upvote (2) Downvote Reply (0) Report Popular SearchesAccountant Jobs Engineers Jobs Software Engineer Jobs Sales Jobs Sales Executive Jobs More Questions Like This
Do you need help in adding the right keywords to your CV? Let our CV writing experts help you. Get Help The physical units method assumes that the types of units are comparable and similar in value. If not, it's really a poor method. Say we were making bottles of diet soda ... to keep it simple, say we had 3 flavors: cola, orange and root beer. The sales value of each type is the same, let's say $2 each. We make a production run of 30,000, 10,000 of each flavor at a cost of $3,000. Lets do the physical units method. Each product has 1/3 of the units and gets 1/3 of the cost, or $1,000. Now let's use the sales value. Each product would have a sales value of $2*1,000 or $2,000. They would have 1/3 of the sales value and thus, the same allocation as the physical units. Recommended textbook solutions
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Intermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions Essentials of Investments9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie 689 solutions Accounting: What the Numbers Mean9th EditionDaniel F Viele, David H Marshall, Wayne W McManus 345 solutions What is the purpose for allocating joint cost?Joint Costs: The Right Way to Allocate. With so much attention these days paid to fundraising ratios, many nonprofits feel pressure to minimize their fundraising expenses. This makes allocating joint costs — costs associated with activities that have both fundraising and other functions — appealing.
What are four purposes of cost allocation?The four main purposes for allocating costs are to predict the economic effects of planning and control decisions, to motivate managers and employees, to measure the costs of inventory and cost of goods sold, and to justify costs for pricing or reimbursement.
Why are joint costs allocated to individual products?Reasons for Allocating Joint Costs to Individual Products
For cost reimbursement under contracts where not all the separable products go to a single customer so that allocation of the joint costs is necessary. For settlement of insurance claims involving separable products at or beyond split-off.
What are common methods for allocating joint costs?Three methods of allocating joint product costs are the physical units method, the market value method, and the net realizable method. The constant gross margin percentage method is also used to allocate joint cost.
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The primary purpose for allocating common costs to joint products is to determine
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