A Joint Input Costing $500 Results in Four Distinct Products

question 19

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows: $\begin{array}{lrrr}&\text { Sales Value }& \text { Separable }& \text { Sales Value After }\\\text { Product }& \text { at Split-Off } & \text { Cost } & \text { Further Processina }\\\hline\mathrm{J }& \$ 200 & \$ 100 & \$ 400 \\\mathrm{K} & 300 & 200 & 600 \\\mathrm{L} & 100 & 50 & 140 \\\mathrm{M} & 20 & 10 & 40\end{array}$ If one unit of L is further processed as shown above, it can be processed again at an additional cost of $160 to obtain product XX. If the firm is to be no worse off from producing product XX, then XX must sell for at least:

• A) $250
• B) $260
• C) $290
• D) $300

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Definitions:

Modified

Altered or changed in form, character, or substance, usually to improve or adapt to different situations.

Intentional Torts

Legal wrongs resulting from actions taken with the intent to cause harm or injury, as opposed to resulting from negligence or accidents.

Negligent Torts

Legal claims arising from acts or omissions that constitute a breach of a duty of care, leading to harm or injury to another party.

Reasonable Care

The degree of caution and concern an ordinarily prudent and rational person would use in similar circumstances.