A Joint Input Costing $500 Results in Four Distinct Products

question 48

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Products J, K and L are main products, and product M is a by-product. Relevant data follows: $\begin{array}{l}&\text { Sales Value }&\text { Separable }&\text { Sales Value After }\\\text { Product }&\text { at Split-Off }& \text { Cost } &\text { Further Processing }\\ \text { J (main) } &\$200&\$100&\$400\\ \text {K (main) }&300&200&600 \\ \text {L (main) } &100&-&-\\ \text {M (by-product) }&20&10&40\end{array}$

If the revenue from Product M is recognized at time of sale, at what cost will it be inventoried before further processing?

• A) $0
• B) $10
• C) $20
• D) $30

Understand the definitions and functions of various health insurance terms and policies.

Identify the different health care delivery systems and their characteristics.

Recognize the role and implications of managed care in patient care coordination.

Comprehend the process and importance of precertification, preauthorization, and predetermination in health care.

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Definitions:

Variable Component

A portion of a cost or expense that varies directly with changes in production volume, business activity, or other variables.

Least-Squares Regression

A statistical method used to determine a line of best fit by minimizing the sum of the squares of the differences between observed values and those predicted by the model.

Inspection Cost

Expenses associated with the activities necessary to ensure that products or services meet the required standards and specifications.

Contribution Format

A format for the income statement that divides variable costs from fixed costs to emphasize the contribution margin.