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:

Deductible

In insurance, it is the amount paid out of pocket by the policyholder before an insurance provider will pay any expenses.

Health Care Demanded

Refers to the quantity of health care services that individuals are willing and able to purchase at a given price.

Managed-Care Organizations

Health insurance companies that provide medical care directly to the insured individuals through specific networks of doctors, hospitals, and other healthcare providers.

Health Maintenance Organizations

A type of health insurance plan that provides comprehensive healthcare services to enrolled members for a fixed, prepaid fee.