The relative sales value method is the most widely used method of apportioning joint costs because (ignoring the effect of further processing costs) it assumes that all products achieve the same profit margin.

Related MCQs

• Which of the following procedure is incorrect for attributing overhead costs to cost units? I. Collecting production overhead costs by item II. Establishing cost centres III. Allocating and apportioning overhead costs to cost centres IV. Apportioning service cost centre costs to production cost centres V. Absorbing production cost centre costs into cost units
• Which of the methods of apportionment is normally used for apportioning common costs between joint products?
• In Units basis, Common costs are apportioned between joint products on the basis of the total number of units produced. The cost per unit is the same for all the joint products. (This is also described as the physical quantities basis).
• What would be the most appropriate way of apportioning depreciation costs across different manufacturing departments in a business?
• . What would be the most appropriate way of apportioning depreciation costs across different manufacturing departments in a business?
• In order to calculate a cost for each joint product, the common costs must be ________ between the joint products.
• Joint products are two or more products generated simultaneously, by a single manufacturing process using common input, and being substantially equal in value.
• Cost plus pricing means that a desired profit margin is added to total costs to arrive at the selling price.
• Apportionment means sharing on a reasonable basis. Many overhead costs are costs that cannot be allocated directly to one cost centre, because they are shared by two or more cost centres. These costs are apportioned between the cost centres.
• Joint Cost are ………………to individual joint products.