Quaker Company refines a single raw material in a process that results in several joint products. The refining costs incurred prior to the split-off point where the joint products appear is irrelevant to the decision to further process any of the joint products.

Question

Quizplus · Accepted Answer

The refining costs incurred prior to the split-off point are considered sunk costs and do not affect the decision to further process the joint products.

Quaker Company Refines a Single Raw Material in a Process