Which cost allocation method should NOT be used to eliminate the conflict between decision making and performance evaluation?
A)sales value at splitoff
B)NRV
C)physical measures
D)constant gross-margin percentage NRV

Question

Quizplus · Accepted Answer

Constant gross-margin percentage NRV is not used to eliminate the conflict between decision making and performance evaluation because it can lead to incorrect decisions being made. This is because the constant gross-margin percentage NRV method does not take into account the actual costs of producing the products, and can therefore lead to products being priced too high or too low.

Which Cost Allocation Method Should NOT Be Used to Eliminate