Dodrill Company Makes Two Products from a Common Input

question 5

Multiple Choice

Dodrill Company makes two products from a common input. Joint processing costs up to the split-off point total $43,200 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
-What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

• A)$26,800
• B)$19,800
• C)$52,200
• D)$45,200

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Definitions:

Moderately Strong Association

A statistical term indicating that there is a noticeable but not overwhelming relationship between two variables.

Little or No Association

A term used in statistics to describe a situation where there is minimal or no statistical relationship between two variables.

Nonlinear

Describing a process, relation, or equation in which there is not a straight line relationship between variables.

Positive

An attribute or condition that denotes the presence of a particular trait, value, or outcome, typically associated with desirable results.