HGT Corporation Produces Four Products from a Common Production Process

question 84

Multiple Choice

HGT Corporation produces four products from a common production process. Selected data from HGT's accounting system for the four products appears below: Joint costs for the accounting period totalled $5,000. Each product line has a different product manager who is evaluated based on product line profitability. Therefore each manager is motivated to reduce his / her total product line costs as much as possible. The managers have been given information about potential joint cost allocations using the following three methods: physical output, sales at split-off point, and net realizable value. The managers are comparing the joint cost allocations under each method so that they can give the accountant input about their preferred method(s) .
Which product line would receive the least amount of joint cost under the physical output method?

• A) Sofa cushions
• B) Floor cushions
• C) Full-body pillows
• D) None of the above

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Definitions:

Conflict

A situation or process in which individuals or groups have opposing interests, values, or goals, which can lead to disagreement or confrontation.

Negatively Affected

Being impacted in an adverse or detrimental manner, often resulting in decreased performance or well-being.

Constructive Conflict

The positive and productive resolution of differences and disagreements that contributes to the goals and success of a group or organization.

Positive Application

The act of applying a concept, principle, or method in a way that results in beneficial or favorable outcomes.