Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

Irrelevance of joint costs for decision making

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• Solutions to review questions 6.1

Irrelevance of joint costs for decision making Later chapters will stress that a cost must differ among alternatives to be relevant to a decision. Ina sell or process further decision, the joint costs will be incurred whether or not the product is processed further. Since the joint cost does not differ between the two alternatives – sell or process further – joint costs cannot be relevant to this decision. Solutions to review questions 6.1 A joint cost is a cost of a single process that yields multiple products simultaneously. Download 1.72 Mb. Share with your friends: