Use the Information Below to Answer the Following Question(s)

question 97

Multiple Choice

Use the information below to answer the following question(s) .Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y) are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
-Which of the following is FALSE concerning the physical measure method?

• A)Technical personnel outside of accounting may be required in the joint costing determinations.
• B)Using the benefits-received criterion, the physical measure method less preferred than the sales at splitoff method.
• C)The physical measure may not reflect each individual product's ability to generate revenues.
• D)Using a common physical measure can result in the product with the lowest revenue-producing power having the most costs assigned to it.
• E)It results in a constant gross margin for all products.

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Definitions:

Risky Investment

An investment that carries a higher probability of losing money, alongside the possibility of yielding high returns.

Risk-free Investment

An investment that is considered to have no risk of financial loss, often represented by government bonds in stable countries.

Beta

Beta is a measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates that the stock is more volatile than the market, while a beta less than 1 suggests it is less volatile.

Expected Return

The weighted average of all possible returns for a given investment, accounting for the likelihood of each outcome.