Belize Corporation Has a Joint Process Which Produces Three Products

question 135

Multiple Choice

Belize Corporation has a joint process which produces three products: X, Y, and Z. Each product may be sold at split- off or processed further and then sold. Joint processing costs for a year amount to $100,000. Other relevant data are as follows: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\& \text { Sales V alue at } & \text { Costs after } & \text { Sales Value at } \\\text { Product } & \text { Split- off } & \underline{\text { Split-off }} & \text { Completion }\\X & \$ 128,000 & \$ 16,000 & \$ 160,000 \\Y & 50,000 & 26,000 & 76,000 \\Z & 25,600 & 20,000 & 40,000\end{array}$ In processing Product Z further:

• A) profits will decrease by $5,600
• B) profits will increase by $20,000
• C) incremental profits will exceed incremental costs
• D) the additional revenue produced will exceed the additional costs

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Definitions:

Labor Standards

Regulations concerning the rights and welfare of workers, including minimum wage, working hours, safety, and health protections, and non-discrimination practices.

NAFTA

The North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that eliminated most tariffs and trade barriers between the countries, in effect from 1994 to 2020.

Labor Cooperation

The collaboration between workers, unions, and sometimes employers to achieve common goals, such as improving working conditions or productivity.

Social Dumping

The practice of companies moving production to countries with lower labor standards or costs, often leading to job loss and reduced labor conditions in the originating country.