Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 16 - Cost Allocation: Joint Products and Byproducts - Assignment Material - Questions - Page 652: 16-15

Answer

Managers may prefer the sales method for byproducts when seeking a monthly bonus tied to target operating income because it allows them to time byproduct sales to impact reported income, potentially meeting or exceeding targets. This can be seen as a drawback, as it might encourage short-term manipulation of financial results.

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