Question
Fact Pattern: Huron Industries has recently developed two new products, a cleaning unit for video discs and a disc duplicator for reproducing movies taken with
Fact Pattern: Huron Industries has recently developed two new products, a cleaning unit for video discs and a disc duplicator for reproducing movies taken with a video camera. However, Huron has only enough plant capacity to introduce one of these products during the current year. The company controller has gathered the following data to assist management in deciding which product should be selected for production. Hurons fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to products.
The costs included in Hurons fixed overhead are:
a. Joint costs.
b. Committed costs.
c. Opportunity costs.
d. Prime costs.
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