Asked by Ariana Rinehart on Jun 14, 2024
Verified
An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision.
Avoidable Fixed Production Cost
Costs that can be eliminated if a particular product or segment is discontinued, without affecting other operations.
Split-off Point
The stage in a process manufacturing at which various products become separately identifiable and can be handled as distinct items.
Joint Process
A production process in which two or more products are generated simultaneously from the same raw materials or input.
- Distinguish between costs that are pertinent and extraneous in the context of making decisions.
- Investigate the strategic outcomes associated with capacity utilization, bottleneck handling, and the allocation of joint costs in operational processes.
Verified Answer
MG
Matthew gerriorJun 18, 2024
Final Answer :
False
Explanation :
Avoidable fixed production costs incurred before the split-off point are not relevant in a sell or process further decision because they are sunk costs and cannot be changed by the decision.
Learning Objectives
- Distinguish between costs that are pertinent and extraneous in the context of making decisions.
- Investigate the strategic outcomes associated with capacity utilization, bottleneck handling, and the allocation of joint costs in operational processes.