Which of the Following Is True of the Physical-Measure Approach

question 114

Multiple Choice

Which of the following is true of the physical-measure approach of allocating joint costs?

• A) Costs cannot be allocated if the measurement basis for each product are different.
• B) Physical measures usually result in less costs being allocated to the product that weighs the most.
• C) The physical measure reflects a product's ability to generate revenues.
• D) Obtaining comparable physical measures for all products is always straightforward.

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Definitions:

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial metrics.