Triple 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 are $25,000. Product A can be sold at the split-off point for $32,000.Alternatively,Product A can be processed further and sold for $40,000.Additional processing costs are $5,000.
When 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)additional processing cost of $5,000

Question

Quizplus · Accepted Answer

The joint processing cost of $25,000 is not relevant because it is a sunk cost that will be incurred regardless of whether Product A is sold at the split-off point or processed further.

Triple Corporation Has a Joint Process That Produces Two Products