Two Products, LB and NH, Emerge from a Joint Process

question 137

Multiple Choice

Two products, LB and NH, emerge from a joint process. Product LB has been allocated $30,800 of the total joint costs of $44,000. A total of 2,000 units of product LB are produced from the joint process. Product LB can be sold at the split-off point for $13 per unit, or it can be processed further for an additional total cost of $14,000 and then sold for $15 per unit. If product LB is processed further and sold, what would be the effect on the overall profit of the company compared with sale in its unprocessed form directly after the split-off point?

• A)$16,000 more profit
• B)$20,800 more profit
• C)$40,800 less profit
• D)$10,000 less profit

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Definitions:

Polarization

The process by which opinions, perceptions, or actions of a society or group divide into two extreme, opposite positions, often leading to conflict or stark division within the community.

1970s

A decade marked by significant political, social, and cultural change globally, recognized for movements advocating for civil rights, environmental issues, and a shift in music and fashion.

Jimmy Carter

Jimmy Carter was the 39th President of the United States, serving from 1977 to 1981, known for his commitment to peace and human rights.

Presidency

The office and function of the President, the head of state and government in a republic, especially referring to the executive branch in the United States.