Saturday, June 2, 2012

A reason why a physical-measure to allocate joint costs is less preferred than the sales value at splitoff is

ACCOUNTING

Multiple Choice

A reason why a physical-measure to allocate joint costs is less preferred than the sales value at splitoff is

a. a physical measure such as volume is difficult to estimate because of shrinkage.

b. physical volume usually has little relationship to the revenue producing power of products.

c. a physical measure usually results in the costs being allocated to the product that weighs the most.

d. all of the above are reasons why the sales value at splitoff method is preferred to a physical volume measure.

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