Physical unit method

This method is based on the assumption that the joint
products are capable of being measured in the same units. Accordingly joint costs here
are apportioned on the basis of some physical base, such as weight or measure
expressed in gallons, tonnes etc. In other words, the basis used for apportioning joint cost
over the joint products is the physical volume of material present in the joint products at
the point of separation. Any loss arising during the stage of processing is also apportioned
over the products on the same basis. This method cannot be applied if the physical units
of the two joint products are different. The main defect of this method is that it gives equal
importance and value to all the joint products.