Use the following information for the next 2 questions.
A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows:
-To make the most profitable sell-or-process-further decisions, one should consider the
A) Increase in the cost of further processing
B) Increase in sales value due to further processing
C) Increase in sales value due to further processing less the joint costs of processing less the separable costs of processing
D) Increase in sales value due to further processing less the separable costs of further processing

Question

Use the following information for the next 2 questions.
A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows: 
-To make the most profitable sell-or-process-further decisions, one should consider the
A) Increase in the cost of further processing 
B) Increase in sales value due to further processing 
C) Increase in sales value due to further processing less the joint costs of processing less the separable costs of processing 
D) Increase in sales value due to further processing less the separable costs of further processing

Quizplus · Accepted Answer

The decision should be based on the additional revenue from further processing minus the additional costs incurred from that processing, which are the separable costs. Joint costs are irrelevant as they are sunk costs.

Use the Following Information for the Next 2 Questions