LanaTech Produces Three Products, X, Y, and Z, from Recycled

question 61

Short Answer

LanaTech produces three products, X, Y, and Z, from recycled paper. Budgeted data for next month follows: $$\begin{array} { l r r r } & \underline { \mathbf { X } } & \underline { \mathbf { Y } } & \underline { \mathbf { Z } } \\\text { Units produced } & 800 & 2,400 & 1,600 \\\hline \text { Sales value at split-off per unit } & \$ 6 & \$ 15 & \$ 12 \\\text { Additional processing costs per unit } & \$ 1 & \$ 4 & \$ 5 \\\text { Joint production costs per unit } & \$ 2 & \$ 6 & \$ 4 \\\text { Sales value if processed further per unit } & \$ 9 & \$ 20 & \$ 16\end{array}$$ The joint cost of the recycled paper is $110,000. Which of the products should be produced beyond the split-off point? $\begin{array}{llll}&X&Y&Z\\\text { A. } & \text { No } & \text { Yes } & \text { Yes } \\\text { B. } & \text { Yes } & \text { Yes } & \text { No } \\\text { C. } & \text { No } & \text { No } & \text { No } \\\text { D. } & \text { No } & \text { Yes } & \text { No }\end{array}$

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Definitions:

Placement Recommendations

Recommendations for assigning individuals to specific positions, levels, or types of educational or professional environments based on assessment or evaluation results.

Predictive Validity

Evidence that test scores are able to predict a future criterion or standard. A type of criterion-related validity.

Predictive Validity

A measure of how well a test score or outcome can predict future performance, behavior, or outcomes in a related area.

Cognitive Ability

The capacity to perform higher mental processes of reasoning, remembering, understanding, problem solving, and decision making.