Products A,B,and C Are Produced from a Single Raw Material

question 80

Multiple Choice

Products A,B,and C are produced from a single raw material input.The raw material costs $90,000,from which 5,000 units of A,10,000 units of B,and 15,000 units of C can be produced each period.Product A can be sold at the split-off point for $2 per unit,or it can be processed further at a cost of $12,500 and then sold for $5 per unit.Product A should be:

• A)sold at the split-off point,since further processing would result in a loss of $0.50 per unit.
• B)processed further,since this will increase profits by $2,500 each period.
• C)sold at the split-off point,since further processing will result in a loss of $2,500 each period.
• D)processed further,since this will increase profits by $12,500 each perioD.

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Definitions:

Occipital Lobes

Portion of the cerebral cortex lying at the back of the head; includes areas that receive information from the visual fields.

Temporal Lobes

Portion of the cerebral cortex lying roughly above the ears; includes the auditory areas, each receiving information primarily from the opposite ear.

Motor Cortex

An area at the rear of the frontal lobes that controls voluntary movements.

Association Areas

Regions of the brain that integrate sensory and motor information, involved in higher mental functions such as learning, thinking, and creativity.