It is profitable to extend processing or to incur additional distribution costs on a joint product if the
A) incremental expenses exceed incremental revenues.
B) sale of the product is guaranteed.
C) additional revenue exceeds the additional expenses.
D) joint products are inseparable.

Question

Quizplus · Accepted Answer

In order to make a profitable decision, the additional revenue from the extended processing or additional distribution costs should outweigh the costs incurred. Therefore, if the additional revenue exceeds the additional expenses, it would be profitable to extend processing or incur additional distribution costs on a joint product.

It Is Profitable to Extend Processing or to Incur Additional