If the incremental costs of processing further are greater than the incremental revenue,the decision of selling the product at the split-off point is justified.

Question

Quizplus · Accepted Answer

If the incremental costs of processing further exceed the incremental revenue, then it would not be financially advantageous to continue processing the product beyond the split-off point. In such a scenario, it makes more sense to sell the product at the split-off point, rather than incurring additional costs that exceed the additional revenue generated by further processing.

If the Incremental Costs of Processing Further Are Greater Than