The Carter Corporation Makes Products a and B in a Joint

question 36

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:

Trade Deficit

A situation where a country's imports of goods and services exceed its exports of them.

Peso Price

The value of a good or service expressed in pesos, the currency of various Latin American countries.

Exchange Rate Appreciation

Exchange rate appreciation refers to the increase in value of one currency relative to another, meaning you need fewer units of the appreciating currency to buy one unit of another currency.

Domestic Deflation

A decline in the general price level of goods and services within a domestic economy over a period of time.