Detailed Answer
Answer (A) is correct.
Joint costs are most often assigned on the basis of relative sales values or
net realizable values. Basing allocations on physical quantities, such as
pounds, gallons, etc., is usually not desirable because the costs assigned
may have no relationship to value. When large items have low selling
prices and small items have high selling prices, the large items might
always sell at a loss when physical quantities are used to allocate joint
costs.
