In a sell-or-process-further decision,the common costs incurred prior to the spilt-off point are irrelevant.

Name: In a sell-or-process-further decision,the common costs incurred prior to the spilt-off point are irrelevant.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Common costs are costs that are incurred regardless of whether a product is sold at the split-off point or processed further. Therefore, they should not be considered in a sell-or-process-further decision as they will not affect the decision one way or the other.

In a Sell-Or-Process-Further Decision,the Common Costs Incurred Prior to the Spilt-Off