Help Save& Exit Subm Product X-547 is one of the joint products in a joint manuf

Question

Help Save& Exit Subm Product X-547 is one of the joint products in a joint manufacturing process. Management is considering whether to sell X-547 at the split-off point or to process X-547 further into Xylene. The following data have been gathered L Selling price of X-547 IL Variable cost of processing X-547 into Xylene IlI. The avoidable fixed costs of processing X-547 into Xylene. V. The selling price of Xylene V. The joint cost of the process from which X-547 is produced. Which of the above items are relevant in a decision of whether to sell the X-547 as is or process it further into Xylene? Multiple Choice

Explanation / Answer

Answer :I,II, III and IV

Selling price after and before further process should be considered for incremental revenue and additional costs also to be considered to verify incremental profit.

V. is irrelevant this decision as it is sunk cost.

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