Use the Following Information for the Next 2 Questions

question 105

Multiple Choice

Use the following information for the next 2 questions.
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:
-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

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Definitions:

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good and the actual market price they pay.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Total Utility

The overall level of satisfaction or fulfillment a consumer receives from consuming a specific quantity of a good or service.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.