A Joint Input Costing $500 Results in Four Distinct Products

question 91

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows: $\begin{array}{cccc}&\text { Sales Value } &\text {Separable} &\text {Sales Value After }\\\text { Product } &\text { at Split-Off } &\text { Cost } & \text { Further Processing }\\\text {J }& \$ 200 & \$ 100 & \$ 400 \\\text {K }& 300 & 200 & 600 \\\text {L }& 100 & 50 & 140 \\\text {M} & 20 & 10 & 40\end{array}$
Which of the four products should not be further processed?

• A) J
• B) K
• C) L
• D) M

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Definitions:

Maximum Price

A price ceiling set by a government or regulatory body, above which a particular good or service cannot be sold.

Government

The governing body of a nation, state, or community which is responsible for making and enforcing laws and managing public resources and affairs.

Rationing Mechanism

a system or policy by which scarce goods or services are distributed.

Market Economies

Market economies are economic systems in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses with minimal government intervention.