The sales value at split-off method is preferred. All the following are true regarding the reasons, except:
A)Sales prices at the split-off point are objective.
B)The sales value at split-off method measures the true economic value of a company.
C)The sales value at split-off method measures benefits returned to the company.
D)The ROI (return on investment) is accurately measured and the point of being in business.

Question

Quizplus · Accepted Answer

The sales value at split-off method does not measure the true economic value of a company; it is used to allocate joint costs based on the relative sales value of products at the split-off point.

The Sales Value at Split-Off Method Is Preferred