MENTION the circumstances under which following types of method of apportioning joint costs can be used. 1. Net Realisable Value (NRV) at Split-off…
CA Intermediate · Cost and Management Accounting · MTP · January 2026
MENTION the circumstances under which following types of method of apportioning joint costs can be used. 1. Net Realisable Value (NRV) at Split-off Point Method 2. Technical Estimates 3. Market value at the point of separation 4. Market value after further processing
Suggested Answer and Working Notes:
Method Method Circumstances Net Realisable Value (NRV) at Split-off Point Method When the realisable value of joint products at split-off is not known. Technical Estimates When the result obtained by Net Realisable Value (NRV) at Split-off Point Method does not match with the resources consumed by joint products. Market value at the point of separation Where further processing costs are incurred disproportionately. Market value after further processing Where further processing costs after the point of separation are proportionate and all the joint products are subject to further processing.
Topics: Process & Operation Costing, Joint Products and By Products
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