Balley, Inc Which Product(s) Should Be Processed Beyond the Split-Off Point?
A)

question 89

Multiple Choice

Balley, Inc. produces three milk products (all are main products) from a joint process costing $200,000. Data from the current period's operation follow: $\begin{array}{lcccc}&\text { Units } & \text { Unit Sales Price } & \text { Separable } & \text { Total Revenue After }\\&\text { Produced} & \text { at Split-Off } & \text { Costs }& \text { Further Processing }\\\text { Regular } & 5,000 & \$ 5 & \$ 10,000 & \$ 40,000 \\\text { Fat-free } & 15,000 & 7 & 16,000 & 120,000 \\2 \% & 30,000 & 8 & 5,000 & 250,000\end{array}$
Which product(s) should be processed beyond the split-off point?

• A) Regular and Fat-free only
• B) Regular and 2% only
• C) Fat-free only
• D) 2% only

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Definitions:

Insufficient Basis

A flaw in reasoning or argumentation where the evidence or grounds provided are not adequate to support the conclusion drawn.

True

Accurate or consistent with fact or reality; not false.

Hasty Generalization

A logical fallacy in which a broad conclusion is drawn from a small set of evidence or examples.

Generalizations

A process in reasoning where broader conclusions are drawn from specific cases or examples.