Dock Corporation Makes Two Products from a Common Input

question 66

Multiple Choice

Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

• A) $31,800
• B) $20,500
• C) $16,800
• D) $35,500

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Definitions:

Opiates

Natural or synthetic drugs that produce effects similar to those of opium, often used for pain relief but with a high potential for addiction.

Central Nervous System

The complex network of the brain and spinal cord responsible for processing and coordinating incoming and outgoing neural signals.

HIV

Human Immunodeficiency Virus, a virus that attacks the body's immune system, leading to AIDS if not treated.

Xanax

A prescription medication, generically known as alprazolam, used to treat anxiety and panic disorders.