All of the Following Statements About the Constant Gross Margin

question 79

Multiple Choice

All of the following statements about the constant gross margin percentage net-realizable method are true EXCEPT

• A) all products have equal gross margin percentages.
• B) it is based on a tenuous underlying assumption.
• C) the gross margin percentage remains the same regardless of the different amounts of separable costs.
• D) the gross margin is calculated by deducting all separable costs from revenue.
• E) some products may receive negative allocations of joint costs.

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