Which of the following is NOT a market-based approach to allocating costs?
A)sales value at splitoff
B)constant gross-margin percentage NRV
C)physical measures
D)net realizable value

Question

Quizplus · Accepted Answer

Physical measures do not use market values to allocate costs; instead, they allocate costs based on the quantity or volume of a certain measure, such as weight, units, or time. The other three choices are market-based approaches to allocating costs. "Sales value at splitoff" allocates costs based on the relative sales values of the products at the point of separation in the production process. "Constant gross-margin percentage NRV" allocates joint costs based on the relative contribution margins of the products. "Net realizable value" allocates joint costs based on the expected selling prices of the products less any further processing or selling costs.

Which of the Following Is NOT a Market-Based Approach to Allocating