Suppose That the Joint Cost (In Dollars) for Two Products

question 54

Multiple Choice

Suppose that the joint cost (in dollars) for two products is given by , where x represents the quantity of product X produced and y represents the quantity of product Y produced. Find and interpret the marginal cost with respect to y if 6 units of product X and 10 units of product Y are produced. ​

• A) If x remains at 6, the expected change in cost for an 11^th unit of y is $32.
• B) If x remains at 6, the expected change in cost for an 11^th unit of y is $15.
• C) If x remains at 6, the expected change in cost for an 11^th unit of y is $20.
• D) If x remains at 6, the expected change in cost for an 11^th unit of y is $36.
• E) If x remains at 6, the expected change in cost for an 11^th unit of y is $51.

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Definitions:

Standard Costs

Standard costs are predetermined costs established as targets for the production of goods or rendering of services, used as benchmarks to measure performance.

Actual Costs

The real expenses incurred or paid during a project or operation, as opposed to budgeted or estimated costs.

Differences

Refers to the disparities or variations that exist between two or more items, figures, or entities, often used in financial analysis and auditing.

Preset Costs

Preset costs are predetermined expenses that a company expects to incur in the carrying out of its operations.