A Joint Input Costing $500 Results in Four Distinct Products

question 18

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Products J, K and L are main products, and product M is a by-product. Relevant data follows: Sales Value Separable Sales Value After
Product at Split-Off Cost Further Processing
J (main) $200 $100 $400
K (main) 300 200 600
L (main) 100 -- --
M (by-product) 20 10 40
If the revenue from Product M is recognized at time of sale, at what cost will it be inventoried before further processing?

• A)$0
• B)$10
• C)$20
• D)$30

Acknowledge the significance of inventory management systems, including just-in-time (JIT) systems, in reducing waste and enhancing efficiency.

Understand the strategic decision-making process involved in purchasing, leasing, and negotiating with suppliers.

Understand the purpose and application of a PERT diagram.

Comprehend the functionality and benefits of using Gantt charts for project management.

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Definitions:

Diversifiable Risk

The portion of an investment's risk that can be reduced or eliminated through the practice of diversifying one's investment portfolio across various assets.

Systematic Risk

The inherent risk affecting the overall market or a particular sector, which cannot be eliminated through diversification.

Market Risk

The risk of losses in investments due to factors that affect the entire market or asset class, such as economic changes or political events.

Firm-specific Risk

The type of risk that affects a particular company or industry, also known as unsystematic risk.