Dowchow Company Makes Two Products from a Common Input $\$ 38,400$

question 84

Multiple Choice

Dowchow Company makes two products from a common input. Joint processing costs up to the split-off point total $\$ 38,400$ a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

$\begin{array}{|l|r|r|r|}\hline & \text { Product X } & \text { Product Y } & \text { Total } \\\hline \text { Allocated Joint Processing Costs } & 20,800 & 17,600 & 38,400 \\\hline \text { Sales Value at Split-Off Point } & 26,000 & 22,000 & 48,000 \\\hline \text { Costs of Further Processing } & 22,600 & 20,400 & 43,000 \\\hline \text { Sales Value after Further Processing } & 45,000 & 45,900 & 90,900 \\\hline\end{array}$
-What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

• A) $20,800.
• B) $22,400.
• C) $43,400.
• D) $45,000.

Acknowledge the importance of core competencies in strategic focus and business restructuring.

Grasp Michael Porter's generic strategies and their application in seeking competitive advantage.

Understand the dynamics of the strategic planning process and common pitfalls.

Differentiate between strategies focused on cost leadership and differentiation as competitive advantages.

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Definitions:

Representative Sample

A subset of a population that accurately reflects the members of the entire population, used in statistical analysis.

Skewed Distribution

A type of distribution in which data points are not evenly distributed around the mean, leading to a longer tail on one side of the distribution.

Longitudinal Study

A research design that involves repeated observations of the same variables (such as people) over short or long periods of time, sometimes lasting many years.

Cross-Sectional Study

A research method that examines data from a population at a single point in time to identify patterns and correlations.