Which of the Following Is False Concerning the Physical Measure

question 54

Multiple Choice

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 split off 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:

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Capital Rationing

The practice of limiting investments or expenditures in new projects due to budget constraints or capital availability.

IRR

IRR (Internal Rate of Return) is a financial metric used to evaluate the profitability of an investment, representing the interest rate at which the net present value of cash flows from the investment is zero.

Initial Investments

The initial amount of money put into a project or venture at the start of its operation.