A Reason Why a Physical-Measure to Allocate Joint Costs Is

question 56

Multiple Choice

A reason why a physical-measure to allocate joint costs is less preferred than the sales value at splitoff is because ________.

• A) a physical measure such as volume is difficult to estimate than sales value
• B) physical volume usually has little relationship to the revenue producing power of products
• C) a physical measure usually results in less costs being allocated to the product that weighs the most
• D) customers will easily understand that the products are overpriced

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Definitions:

Stereotyping

A cognitive process where individuals generalize attributes, characteristics, and behaviors to members of a particular group.

Prejudice

A preconceived opinion that is not based on reason or actual experience.

Hindsight Bias

The inclination to believe, after an event has occurred, that one would have predicted or expected the outcome.

Stereotype

A widely held but oversimplified and generalized belief about a particular category of people or things.