The ________ method is used to allocate the cost of multiple assets acquired in a basket purchase.
A)book-value
B)cost
C)gross margin ratio
D)relative-sales-value

Question

Quizplus · Accepted Answer

The relative-sales-value method is commonly used to allocate the cost of multiple assets acquired in a basket purchase. This method calculates the proportionate value of each asset in the group based on its individual market value, allowing for a more accurate allocation of costs. The other options, such as the book-value and cost methods, do not take into account the individual values of the assets acquired and may not accurately reflect their respective contributions to overall value. The gross margin ratio is a measure of profitability and not relevant to the allocation of costs in a basket purchase.

The ________ Method Is Used to Allocate the Cost of Multiple