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

Question

Quizplus · Accepted Answer

Physical measures such as volume or weight do not necessarily have a direct relationship to the revenue producing power of products. Sales value at splitoff is a more appropriate method because it directly reflects the relative value of the different products produced from the joint process.

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