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: 16-9

Answer

1. Lack of Revenue Relationship: The physical-measure method may not reflect the revenue potential of individual products, as it relies on physical weights that might not correspond to their sales values. 2. No Common Denominator: When joint products have diverse physical forms without a common conversion factor, the method can be impractical for accurate cost allocation.

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