Consider the following statement: Overall sales revenue minus overall costs (joint plus further processing costs)is calculated to yield gross profit and the gross profit percentage.Each product is then assigned the same cost of goods sold percentage.Which joint cost allocation method does the statement describe?

Question

Quizplus · Accepted Answer

The statement describes the constant gross margin method, which involves allocating joint costs in a way that ensures each product has the same profit margin percentage by using a constant gross margin percentage. This method is also known as the gross margin method or the profit margin method.

Consider the Following Statement: Overall Sales Revenue Minus Overall Costs