To determine the cost of a main product with by-products,we take the cost of the main product and ________.
A) add separable costs of the by-products and add revenues from the by-products
B) add separable costs of the by-products and subtract revenues from the by-products
C) subtract separable costs of the by-products and add revenues from the by-products
D) subtract separable costs of the by-products and subtract revenues from the by-products

Question

Quizplus · Accepted Answer

When determining the cost of a main product with by-products, we need to consider the separable costs of the by-products and the revenues generated from them. We can do this by subtracting the total separable costs of the by-products (e.g. production, marketing, distribution expenses) and the revenues generated from the by-products from the cost of the main product. Therefore, choice B - adding separable costs of the by-products and subtracting revenues from the by-products - is the correct answer.

To Determine the Cost of a Main Product with By-Products,we