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

---

Definitions:

Societal Institution

An established organizational structure or system in society that governs the behavior and expectations of its members.

Economy

The system by which goods and services are produced, distributed, and consumed in a society.

Production

The process of creating goods or services through the combination of labor, materials, and technology.

Distribution

Involves the process of making goods, services, or resources available to consumers or beneficiaries.