Use the Following Information for the Next 2 Questions

question 22

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. Relevant data follows:
-To make the most profitable sell-or-process-further decisions, one should consider the

• A) Increase in the cost of further processing
• B) Increase in sales value due to further processing
• C) Increase in sales value due to further processing less the joint costs of processing less the separable costs of processing
• D) Increase in sales value due to further processing less the separable costs of further processing

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Definitions:

Contractual Vertical Marketing System

A system in which independent firms at different levels of the distribution chain work together through contractual agreements to achieve greater economies of scale and reach a greater market effectiveness than they could achieve alone.

Horizontal Marketing System

A collaboration strategy where companies at the same level of the value chain join forces to exploit a marketing opportunity.

Administered Vertical Marketing System

A coordinated marketing system managed by a single channel member to achieve efficient distribution.

Wholesaler-sponsored Voluntary Chains

Agreements between independent retailers and wholesalers to engage in bulk buying and standardized selling practices to compete with large chains.