A Joint Input Costing $500 Results in Four Distinct Products

question 100

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows: $\begin{array}{lrrr}&\text { Sales Value }& \text { Separable }& \text { Sales Value After }\\\text { Product }& \text { at Split-Off } & \text { Cost } & \text { Further Processina }\\\hline\mathrm{J }& \$ 200 & \$ 100 & \$ 400 \\\mathrm{K} & 300 & 200 & 600 \\\mathrm{L} & 100 & 50 & 140 \\\mathrm{M} & 20 & 10 & 40\end{array}$ Assume that after the split-off point one unit of J can be processed directly into one unit of K, and then processed further as shown for product K. For the purpose of making this decision, what is the opportunity cost to be assigned to a unit of J?

• A) $400
• B) $300
• C) $200
• D) $100

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Definitions:

Steer Axle Tire

A tire specifically designed for the front axle of a vehicle, offering precise steering control and responsiveness.

Aggressive Braking

The act of applying the vehicle's brakes forcefully and rapidly, often leading to abrupt deceleration and increased wear on brake components.

Hub-Piloted

A type of wheel mounting system on vehicles where the hub centers the wheel and bears the weight, improving alignment and stability.

Truck Disc Wheels

Wheels made for trucks that feature a flat disc design, commonly constructed from steel or aluminum, providing support for the tire.