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
E)the company president's salary

Question

Quizplus · Accepted Answer

Separable costs after the split-off point are the costs that are directly attributable to each joint product after the split-off point. These costs are relevant in deciding the point at which a product should be sold in order to maximize profits because they represent the additional costs that must be incurred in order to produce and sell the product, and therefore affect the profitability of the product. Joint costs to the split-off point, on the other hand, are sunk costs that have already been incurred and cannot be changed, and are therefore not relevant in making decisions about the pricing or sales of joint products. Sales salaries for the period when the units were produced and the purchase costs of the materials required for the joint products are also not relevant in this context, as they are indirect costs that have already been incurred and again cannot be changed. The company president's salary is also not relevant, as it is not a cost that is directly related to the production or sale of the joint products.

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