You Are a Manager at McBride's Dairy Where Whey Is

Multiple Choice

You are a manager at McBride's Dairy where whey is a by-product of the production process. Thinking about the utility and usefulness of by-products in a joint production process, you may decide to take several courses of action. Which of the following actions would you not recommend?

A) Because whey is a good of low value, it is not worth the effort to develop separate product costs for it.
B) The net realizable value method should be used to allocate joint costs to the whey.
C) Revenues from the whey should be used to offset the cost of the joint production process.
D) The sale of whey should be reported as other revenue on the income statement with no related cost of goods sold.