In joint product costing and analysis,which one of the following costs is relevant when deciding the point at which a product should be sold in order to maximize profits? (CMA adapted)
A) separable costs after the split-off point.
B) joint costs to the spilt-off point.
C) sales salaries for the period when the units were produced.
D) purchase costs of the materials required for the joint products.

Question

Quizplus · Accepted Answer

Separable costs after the split-off point are relevant costs when deciding the point at which a product should be sold in order to maximize profits. These costs are the costs that are incurred after the split-off point and are directly related to the individual products. By subtracting the separable costs from the sales price, a company can determine the profit that can be made on each product and make decisions accordingly. Joint costs to the split-off point are not relevant as they have already been incurred and cannot be changed. Sales salaries and purchase costs of materials are also not relevant in this decision.

In Joint Product Costing and Analysis,which One of the Following