Johnson Lumber Mill produces various grades of cut boards from raw lumber. The costs incurred before the split-off point where the cut boards are separated and processed further are
A)investment center costs
B)joint costs that cannot be separated
C)new costs that can be traced to the various grades of lumber being produced
D)new costs that cannot be traced to the various grades of lumber being produced

Question

Quizplus · Accepted Answer

The costs incurred before the split-off point in a process where multiple products are produced from a common input are known as joint costs. These costs cannot be separated or traced to the individual products until after the split-off point.

Johnson Lumber Mill Produces Various Grades of Cut Boards from Raw