Relevant costs in a sell or process-further decision include
A)only costs of additional processing.
B)both additional revenues and additional costs.
C)total revenues after additional processing.
D)joint product costs.

Question

Quizplus · Accepted Answer

In a sell or process-further decision, relevant costs include both the additional revenues and additional costs that result from further processing. This is because the decision involves selecting between two alternatives: selling the product as is or processing it further. Joint product costs are not relevant in this decision unless they can be avoided or reduced by choosing one alternative over the other. Therefore, choice B is the best answer.

Relevant Costs in a Sell or Process-Further Decision Include