Use the Following Information for the Next 8 Questions

question 25

Multiple Choice

Use the following information for the next 8 questions.
HGT Corporation produces four products from a common production process. Selected data from HGT's accounting system for the four products appears below: Joint costs for the accounting period totaled $5,000. Each product line has a different product manager, who is evaluated based on product line profitability. Therefore, each manager is motivated to reduce his / her total product line costs as much as possible. The managers have been given information about potential joint cost allocations using the following three methods: physical output, sales at split-off point, and net realizable value. The managers are comparing the joint cost allocations under each method so that they can give the accountant input about their preferred method(s) .
-If HGT allocates joint costs using the sales value at split-off point method, the total joint cost allocated to full-body pillows (rounded to the nearest dollar) will be

• A) $2,439
• B) $1,250
• C) $2,039
• D) $2,239

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Definitions:

Liability

The state of being legally responsible for something, such as a debt or obligation.

Defect

A shortcoming, imperfection, or flaw in a product, system, or document that can potentially cause failure or problems.

Injury

Harm or damage that is inflicted on a person's body, property, reputation, or rights, often leading to legal liabilities.

Potential Liability

The possibility of being legally responsible for an action or inaction, which might lead to legal action and financial compensation.