I'm not an accountant, but my understanding is that accounting guiding principles say that the answer is B. But that's only because the example is over-simplif

I'm not an accountant, but my understanding is that accounting guiding principles say that the answer is B. But that's only because the example is over-simplified, and assumes that the labor & feed benefit both wool & mutton equally. They don't. For example, a lot of the labor cost will be in the shearing. That should be allocated completely to wool, right? Not so fast, if you don't shear your sheep your meat production will be affected so even farmers that raise sheep for mutton will still shear their sheep. So there is no correct answer in a real-world situation. rahimnathwani is correct.