The Carter Corporation Makes Products a and B in a Joint

question 367

Multiple Choice

The Carter Corporation makes products A and B in a joint process from a single input, R. During a typical production run, 50,000 units of R yield 20,000 units of A and 30,000 units of B at the split-off point. Joint production costs total $90,000 per production run. The unit selling price for A is $4.00 and for B is $3.80 at the split-off point. However, B can be processed further at a total cost of $60,000 and then sold for $7.00 per unit.If product B is processed beyond the split-off point, the financial advantage (disadvantage) as compared to selling B at the split-off point would be:

• A) $36,000 per production run
• B) $96,000 per production run
• C) ($42,000) per production run
• D) ($10,000) per production run

---

Definitions:

Social Insurance Taxes

Taxes collected to fund public programs designed to provide financial assistance and support to individuals during periods of unemployment, disability, or retirement.

Individual Income Taxes

Taxes that governments impose on the financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine their tax obligations.

Budget Deficit

A situation where government spending exceeds its revenues within a specific period, leading to borrowing or depletion of reserves.

Budget Surplus

A situation where a government's revenue exceeds its expenditures during a specific period of time.