C Limited Produces Two Products (A and B)from a Particular

question 17

Multiple Choice

C Limited produces two products (A and B) from a particular joint process.Each product may be sold at split-off or may be further processed.Joint production costs for the year amounted to $60 000.Sales values and costs are as follows.If the joint production costs were assigned using the net realisable value method,the joint costs allocated to B would be:

• A) $23 964
• B) $32 143
• C) $32 617
• D) $39 661

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Definitions:

Production Innovations

New and improved methods or products that increase efficiency or quality in manufacturing or service delivery.

Economic Profits

Profits exceeding the opportunity costs of a business, indicating gains beyond the next best alternative use of its resources.

Monopoly Power

The ability of a single seller or company to control the market for a particular good or service, allowing them to set prices above competitive levels.

Scarce Resources

Goods that are limited in availability and cannot meet all the demands of the consumers.