ariable production price incurred after split-off. An avoidable solved production expense incurred after ~ split-off. I m sorry of the over costs is (are) not relevant in a decision concerning whether the product need to be processed further?

The only price which is not relevant is: "A change production expense incurred before split-off."


To decide whether a firm should further procedure or sell a product at a specific production point, the firm should consider about the additional revenue they gain from further process and the additional cost the additional production spend in compare to offering the product without additional processing. If the marginal revenue is above the added cost, additional production decision will certainly be made.

You are watching: In a sell or process further decision, which of the following costs is relevant?

That is the reason why the variable production price incurred prior to the split-off is sunk price ( i.e whether the decision is to market of to further process, the expense has already consumed) which do it irrelevant in the decision making about to market or more process.

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1. Straight heat depreciation

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2021: Depreciation price = $148000 * 20% 3/12

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Question Completion:

Prepare a classified balance sheet as of December 31, 2021.

Strong Corporation


Classified Balance Sheet

As of December 31, 2021


Current Assets:

Cash $ 23,400

Accounts union 23,200

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Supplies 160,000 $210,900

Total existing assets

Long-Term invest $57,000

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a) Data and also Analysis:


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Accounts Debit Credit

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Accounts receivable 23,200

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Land 46,000

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Common share 210,000

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