Discussion Questions 1&2 - Copy

Discussion Questions 1&2 - Copy - Name Professors name...

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Name: Professor’s name: Course: Date:
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Some of the three methods that are used in allocating joint costs include; physical measures of output, relative sales value, and net realizable value. The physical measures value of output is where the joint costs are allocated in proportion to a respective product’s output measure. If there are products named D, E, and F, the allocation to product D will be (D/ (D + E + F)) * Total Costs. This method has the advantage of being simpler in its design it also has many disadvantages. The second method that can be used is the relative sales value; here joint costs are allocated in proportions to total sales values at the split-off point. This method has the advantages of having the revenue portion that lacks from the former method. Most analysts argue that the price of the product is always driven by the cost in the creation of the product, and then the revenue that is made of the product can be addressed in allocating joint costs. The
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