Mathematics · Cost Accounting
A process produces two joint products, A and B, in equal physical quantities. A and B are sold at the split-off point for $5 per kg and $8 per kg respectively. There are no further costs after the split-off point. If joint costs are apportioned on a relative sales value basis, which of the following statements is true?
- 1Both products will have the same return on sales ratio (operating margin)✓
- 2Product A will have a higher return on sales ratio (operating margin)
- 3The cost per kg will be the same for both products
- 4The cost per kg of product A will be higher than that of product B
Correct answer
Both products will have the same return on sales ratio (operating margin)
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