The third numeraire is the standard margin. This is really neither fish, fowl, nor good red herring. It fails to meet the test of normative justification s it does not explain the effect of the volume change on operating income, and it fails to meet the test of understandability as would be the case of the sales dollar approach. However it is a very good fit with the GAAP approach to the two related ideas of income measurement and inventory valuation. As with the sales dollar approach it can be defended on a positive basis as it is in evidence of use.