All of the following are relevant in a sell or process-further decision except j

Question

All of the following are relevant in a sell or process-further decision except

joint costs.

sales value after further processing.

additional processing costs.

sales value at the split-off point.

Contribution margin information is not relevant for

pricing decisions for special orders.

the elimination of unprofitable segment decisions.

sales mix with resource constraint decisions.

determining the amount that sales exceeded fixed costs.

Relevant costs in a sell or process-further decision include

costs of additional processing.

joint product costs.

both additional revenues and additional costs.

revenues after additional processing.

Anderson Co. makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson's production costs are as follows:

If Anderson accepts the order, $8 of fixed overhead per unit will be eliminated.

What is the relevant cost to produce one unit?

$52

$60

$86

$78

joint costs.

sales value after further processing.

additional processing costs.

sales value at the split-off point.

Explanation / Answer

Joint costs are not relevant in a sell or process-further decision because it will not change.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.