A Joint Input Costing $500 Results in Four Distinct Products

question 141

Multiple Choice

A joint input costing $500 results in four distinct products at the point of split-off. Relevant data follows: Sales Value Separable Sales Value After
Product at Split-Off Cost Further Processing
J $200 $100 $400
K 300 200 600
L 100 50 140
M 20 10 40
If one unit of L is further processed as shown above, it can be processed again at an additional cost of $160 to obtain product XX. If the firm is to be no worse off from producing product XX, then XX must sell for at least:

• A)$250
• B)$260
• C)$290
• D)$300

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