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.

Question

Quizplus · Accepted Answer

The physical measure method does not result in a constant gross margin for all products. The assignment of costs using this method is based on a common physical measure, which may not reflect each individual product's ability to generate revenues. This can result in the product with the lowest revenue-producing power having the most costs assigned to it. In addition, technical personnel outside of accounting may be required in the joint costing determinations, and using the benefits-received criterion, the physical measure method is usually less preferred than the sales at split off method.

Which of the Following Is False Concerning the Physical Measure