If a company uses the physical measures method of allocating joint costs, the gross margin as a percent of sales will always be equal for all joint products with common joint costs.

Question

Quizplus · Accepted Answer

The physical measures method allocates joint costs based on a physical basis such as weight, volume, or units produced, which does not necessarily correlate with the sales value of each product. Therefore, the gross margin as a percent of sales can vary among the joint products.

If a Company Uses the Physical Measures Method of Allocating