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3. 4. Each day, Dreamy Desserts manufactures several thousand gallons of vanilla ice cream from milk, cream, sugar, and vanilla extract. The firm can then
3.
Each day, Dreamy Desserts manufactures several thousand gallons of vanilla ice cream from milk, cream, sugar, and vanilla extract. The firm can then sell the ice cream as is, or it can add additional ingredients and process it into chocolate or strawberry ice cream. Based on this description, which of the following statements is accurate? Both the amount spent on sugar and the amount spent on packaging the vanilla ice cream should be considered a joint cost. The amount spent on vanilla extract should be considered a joint cost, while the amount spent on packaging the vanilla ice cream should not. The amount spent on packaging the vanilla ice cream should be considered a joint cost, while the amount spent on chocolate flavoring should not. Neither the amount spent on vanilla extract nor the amount spent on strawberry flavoring should be considered a joint cost. The loss of a key customer has temporarily caused Bedford Machining to have some excess manufacturing capacity. Bedford is considering the acceptance of a special order, one that involves Bedford's most popular product. Consider the following types of costs. I. Variable costs of the product II. Fixed costs of the product III. Direct fixed costs associated with the order IV. Opportunity cost of the temporarily idle capacity Which one of the following combinations of cost types should be considered in the special order acceptance decision? I, III, and IV. I and IV. II and III. I and 4.
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