What factors should be considered in selecting the most appropriate method of allocating joint costs?

kasneb CPA-Management-Accounting-Section-Two-PAST PAPERS

• Simplicity – the method should be simple to work out especially in the phase of multiple products and multiple split-offs.
• Availability of meaningful common denominator to compute the weighting factors for allocation.
• Subsequent management decisions – the method chosen should take into account any anticipation of subsequent decisions intended by management for further processing of the joint products

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