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

Knowledge of evaluating investment decisions based on present value and discount rates.

Ability to calculate the net present value (NPV) of an investment.

Understand the importance of financing options and interest rates in making investment decisions.

Understand the structure and functions of the three branches of the federal government.

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Definitions:

Lipid Wax

A type of lipid that is solid at room temperature, consisting of long-chain fatty acids and alcohols.

Synthetic Detergent

Man-made soap-like substances that can emulsify oils and hold dirt in suspension in water, used for cleaning.

Unsaturated Fatty Acid

A type of fatty acid with one or more double bonds in the hydrocarbon chain, which can affect the fluidity of cell membranes.

Triglyceride

A type of fat or lipid found in blood, formed from one molecule of glycerol and three fatty acids.