Marin Products Produces Three Products — DBB-1, DBB-2, and DBB-3

question 67

Multiple Choice

Marin Products produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows. The amount of joint costs allocated to product DBB-2 using the net realizable value method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

• A) $2,009,160.
• B) $286,500.
• C) $881,640.
• D) $667,345.
• E) $709,200.

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Definitions:

Nominal Sharpe Ratio

A measure of risk-adjusted performance that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment.

Nominal Return

The amount of profit or loss on an investment before adjusting for inflation.

Real Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power gained or lost.

Holding-period Return

The overall profit earned from owning an asset or a collection of assets for a certain duration, taking into account both earnings and growth in value.