Joint Products a and B Emerge from Common Processing That

question 21

Multiple Choice

Joint products A and B emerge from common processing that costs $150,000 and yields 8,000 units of Product A and 4,000 units of Product B Product A can be sold for $100 per unit. Product B can be sold for $80 per unit. What amount of the joint costs will be assigned to Product B if joint costs are allocated on the basis of number of units produced? (Do not round your intermediate calculations.)

• A)$42,857
• B)$66,667
• C)$50,000
• D)$100,000

---

Definitions:

Nominal Interest Rate

The stated interest rate on a loan or investment, not adjusted for inflation.

Rational Consumer

An assumption in economics that consumers aim to maximize their utility or satisfaction from consumption choices, given their budget constraints.

Cobb-Douglas Utility Function

A specific form of utility function used in economics to represent preferences, where utility is derived from a combination of goods, typically modeled with constants representing the elasticity of substitution between those goods.

Real Interest Rate

The interest rate that has been adjusted to remove the effects of inflation, reflecting the real cost of borrowing.