Post 3 - Jennifer Yoder 1 May 11 5:39 AM MST INITIAL...

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Jennifer Yoder 1 May 11 5:39 AM MST INITIAL POST/Jennifer Yoder Four Management decision Points in a joint production process. 1. Before committing to a joint process, management must decide whether total expected revenue from selling the joint output “basket” of products is likely to exceed total expected processing cost, which includes joint cost, separate processing costs after split-off, selling expenses for the goods, and disposal costs for any waste materials. • If total anticipated revenue exceeds all anticipated costs, managers should compare the income from current use of resources to that provided by the best alternative use. • If the income exceeds that of the best alternative, management would decide that this production process is the best capacity use and would begin production. 2. The next two decisions are made at split-off point 3. How to classify joint process outputs. This decision is necessary because joint cost is assigned only to joint products. Prior to allocation, the joint cost may be reduced by the sales
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Post 3 - Jennifer Yoder 1 May 11 5:39 AM MST INITIAL...

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