Which of the following statements is true of sell-or-process-further decisions in joint costing?
A) Joint costs incurred before the splitoff point are relevant in deciding whether to process the product further.
B) All separable costs in joint-cost allocations are incremental costs.
C) Separable costs incurred before the splitoff point are irrelevant in deciding whether to process the product further.
D) Costs that differ between the alternatives of selling products or processing further are relevant.
Answer: D
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If target sales in units is 80,000, total fixed expenses are $10,000, and the unit contribution margin is $0.30, what is the target operating income?
A) $34,000 B) $14,000 C) $24,000 D) $3,000