Joint cost allocations should be ignored for decisions such as selling a joint product or processing it further.

Name: Joint cost allocations should be ignored for decisions such as selling a joint product or processing it further.
Brand: Quizplus
Rating: 4.8 (34 reviews)

Question

Quizplus · Accepted Answer

Joint cost allocations are sunk costs and should not influence decisions regarding the future, such as whether to sell a joint product as is or process it further. Decisions should be based on relevant costs and benefits that occur after the split-off point.

Joint Cost Allocations Should Be Ignored for Decisions Such as Selling