Which of the following statements about maximizing the profit of joint product processes is true?
A)Joint processing costs incurred prior to split-off should be allocated before making those decisions.
B)Only costs caused by management decisions to choose one or another set of products after split-off are relevant.
C)Only revenues from selling or processing beyond the split-off point and additional expenditures for further processing are relevant.
D)Only costs caused by management decisions to choose one or another set of products after split-off are relevant AND only revenues from selling or processing beyond the split-off point and additional expenditures for further processing are relevant.

Question

Quizplus · Accepted Answer

Joint processing costs incurred prior to split-off cannot be changed and should not impact management decisions. Therefore, only costs caused by management decisions to choose one or another set of products after split-off are relevant. Additionally, only revenues and expenses associated with further processing beyond the split-off point are relevant because they result from management decisions that can maximize profits.

Which of the Following Statements About Maximizing the Profit of Joint