Answer (D) is correct . Joint costs are useful for inventory costing when two or more identifiable products emerge from a common production process. The joint costs of production must be allocated on some basis, such as relative sales value.
Answer (A) is incorrect because Items such as additional processing costs, competitive conditions in sales markets, and the relative contribution margins of all products derived from the common process must be considered in setting selling prices.
Answer (B) is incorrect because Items such as additional processing costs, competitive conditions in sales markets, and the relative contribution margins of all products derived from the common process must be considered in determining whether to continue producing an item.
Answer (C) is incorrect because Management of one department may have no control over joint costs.
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