The Characteristic That Is Most Often Used to Distinguish a Product

question 26

Multiple Choice

The characteristic that is most often used to distinguish a product as either a main product or a by-product is the amount of:

• A) sales value of the products produced during the common production process.
• B) direct manufacturing costs (e.g. ,materials)incurred before the split-off point.
• C) physical measures in the products produced during the common production process.
• D) time (i.e. ,labor)required to produce the products from start to finish.

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Definitions:

Net Present Value

A method for evaluating the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.

Monthly Interest Rate

The interest rate applied to a loan or debt for one month, often used to calculate the monthly interest payment.

Variable Cost

Costs that vary directly with the level of production or the volume of services provided.