Questions:
1. Compare the advantages and disadvantages of the two primary methods used to allocate joint cost to joint products.
2. Why are approximated, rather than actual, net realizable values at split-off sometimes used to allocate joint cost?
3. Which of the two common approaches used to account for by-product/scrap provides better information to management? Discuss the rationale for your answer.
4. When is by-product/scrap cost considered in setting the predetermined overhead rate in a job order costing system? When is cost not considered?
5. Why must not-for-profit organizations determine when it is appropriate to allocate any cost for a joint activity among fund-raising, program, and administrative activities?