If Joint Products End Up with the Same Gross Margin

question 129

Multiple Choice

If joint products end up with the same gross margin percentage, which of the following is true?

• A) The cost allocation method assigned the same cost per unit to each product.
• B) The physical measure method must have been used.
• C) The gross margin percentage NRV method must have been used.
• D) The estimated net-realizable method must have been used.
• E) If all products are sold at the split off point, and there were no opening inventories, the sales value at split off method could have been used.

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Definitions:

Account Size

Refers to the total value of an individual's or entity's investments held within a single account.

Normal Credit Period

A standard duration agreed upon in business transactions, during which a buyer can pay the seller for goods or services without penalty.

Optimal Amount of Credit

The ideal level of borrowing that achieves a balance between the benefits and costs of debt financing.

Total Opportunity Cost

The sum of all the benefits that could have been received from the next best alternative option that was not chosen.