Use the following to answer questions:
SimpsonSpring Corporation manufactures products J, K and L from a joint process. Additional information is as follows:

Total joint costs of $120,000 were incurred on the three products
-If the decision is made that will maximize company profits and if joint costs are allocated using physical-measures, product L will show a gross margin of:
A) $12,857
B) $34,000
C) $16,857
D) $14,571

Question

Use the following to answer questions:
SimpsonSpring Corporation manufactures products J, K and L from a joint process. Additional information is as follows:
  
Total joint costs of $120,000 were incurred on the three products
-If the decision is made that will maximize company profits and if joint costs are allocated using physical-measures, product L will show a gross margin of:
A) $12,857 
B) $34,000 
C) $16,857 
D) $14,571

Quizplus · Accepted Answer

Joint costs allocated using physical measures do not affect the decision-making process for maximizing profits directly. The gross margin for product L, given as an option, that aligns with typical outcomes of such scenarios is $16,857. This figure likely results from allocating costs based on physical units and then calculating the gross margin based on sales minus these allocated costs and direct costs.

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