Your company has been using the relative sales value method for allocating joint costs. The products are

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Your company has been using the relative sales value method for allocating joint costs. The products are similar in physical quantity but have substantial differences in price per unit. Management does not understand why the cost of one unit of product A is much greater than that for product B. The president has expressed the idea that relative sales value allocation results in too much profit for the higher-priced product. She has asked you for a one-paragraph written opinion on the proper accounting methodology. Prepare your response. LO.1

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Cost Accounting Principles And Applications

ISBN: 9780028034287

6th Edition

Authors: Horace R. Brock, Linda Herrington

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