Which of the following statements about maximizing the profit of joint product processes is true?
A) Joint processing costs incurred prior to split-off should be allocated before making those decisions.
B) Only costs caused by management decisions to choose one or another set of products after split-off are relevant.
C) Only revenues from selling or processing beyond the split-off point and additional expenditures for further processing are relevant.
D) Both B and C are true.

Question

Quizplus · Accepted Answer

Only costs and revenues that are directly affected by decisions made after the split-off point are relevant for maximizing profit. Joint costs incurred before the split-off point are sunk and should not influence these decisions.

Which of the Following Statements About Maximizing the Profit of Joint