The Carter Corporation Makes Products a and B in a Joint

question 367

Multiple Choice

The Carter Corporation makes products A and B in a joint process from a single input, R. During a typical production run, 50,000 units of R yield 20,000 units of A and 30,000 units of B at the split-off point. Joint production costs total $90,000 per production run. The unit selling price for A is $4.00 and for B is $3.80 at the split-off point. However, B can be processed further at a total cost of $60,000 and then sold for $7.00 per unit.If product B is processed beyond the split-off point, the financial advantage (disadvantage) as compared to selling B at the split-off point would be:

• A) $36,000 per production run
• B) $96,000 per production run
• C) ($42,000) per production run
• D) ($10,000) per production run

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Definitions:

Fictitious Business Names

Aliases under which individuals or businesses operate that are different from their legal, registered names, often registered with local or state governments.

Professionals

Individuals who possess specialized knowledge or skills in a particular field, often requiring certification or licensing.

Management Flexibility

The ability of a business's management team to adapt to changes or challenges in the operating environment, including strategic decision-making.

Personal Liability

The legal responsibility of an individual to compensate for harm or damages their actions have caused, potentially affecting their personal assets.