# Cost Accounting Quiz 4 Review - Problems.docx - Cost...

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Cost Accounting Quiz 4 Chapter 16 Joint cost allocation and when to use them: - Physical output method o Allocates joint costs to joint products produced during the accounting period on the basis of a comparable physical measure, such as the relative weight, quantity, or volume at the splitoff point o Include only the joint product outputs in the weighting computations - Split-off method o Allocates joint costs to joint products produced during the accounting period on the basis of the relative total sales value at the splitoff point o Selling prices must exist for all products at the splitoff point - Net realizable method o Allocates joint costs to joint products produced during the accounting period on the basis of their relative NRV – final sales value minus separable costs o Used instead of the splitoff method when selling prices for one or more products at splitoff point don’t exist - Constant gross margin NRV method o Allocates joint costs to joint products produced during the accounting period in such a way that each individual product achieves an identical gross margin percentage o Only method where products can receive negative allocations Joint costs - Costs of a production process that yields multiple products simultaneously Separable costs -

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