Which of the Following Statements Is True of Sell-Or-Process-Further Decisions

question 35

Multiple Choice

Which of the following statements is true of sell-or-process-further decisions in joint costing?

• A) Joint costs incurred before the split-off point are relevant in deciding whether to process the product further.
• B) All separable costs in joint-cost allocations are incremental costs.
• C) Separable costs incurred before the split-off point are irrelevant in deciding whether to process the product further.
• D) Costs that differ between the alternatives of selling products or processing further are relevant.

---

Definitions:

Minimum Required Rate

The lowest acceptable return on investment or performance measure that a company or investor expects to achieve.

Operating Assets

Resources owned by a business that are used in its day-to-day operations to generate income.

Residual Income

Income that remains after subtracting all the cost of capital from the net operating profit.

Investment Opportunity

Any vehicle through which funds can be invested to potentially earn a return, such as stocks, bonds, real estate, or a business venture.