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    joint costs at split off: NRV or physical-measures method

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    Assume that your company operates a joint-production process that generates three main products and one by-product. If you allocate joint costs only for financial reporting, would you ever care whether you use the NRV or the physical-measures method? Explain.

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    Solution Preview

    Yes, you might care for two reasons, pricing and inventory values, unless the amount were relatively immaterial. When amounts are small, differences in methods receive little attention. However, presuming the differences between NRV and physical measures was large, you might care because the differences will change what the product ...

    Solution Summary

    Your tutorial is 192 words and gives two reasons why you would likely care and one reason why you might not care.