Triple H Corporation has a joint process that produces two products: A and B.Each product may be sold at the split-off point or processed further and then sold.Joint-processing costs for a year amount to $25,000. Product A can be sold at the split-off point for $32,000.Alternately, product A can be processed further and sold for $40,000.Additional processing costs are $5,000.
In deciding whether to sell product A at the split-off point or to process further, the _____ is not relevant.
A)joint processing cost of $25,000
B)sales value at split-off of $32,000
C)sales value at completion of $40,000
D)all of these answers are relevant

Question

Quizplus · Accepted Answer

The joint processing cost of $25,000 is a sunk cost and not relevant to the decision of whether to sell product A at the split-off point or process it further. The decision should be based on the incremental costs and benefits after the split-off point.

Triple H Corporation Has a Joint Process That Produces Two