What do you think of her analysis? Should Scrumptious sell the stock? d O A. The analysis is flawed. Marketing costs are irrelevant to the decision. Only incremental costs and revenues prior to the splitoff point are relevant in this case, then, the revenues, $22.500, and the joint costs $12,687, from selling the stock result in an increase in Scrumptious's operating income of $9,813 Therefore, Scrumptious should sell the stock O B. Allocating joint costs to products according to the sales value at splitoff is a valid method of cost allocation Based on Dong's analysis using the sales value at splitoff method, selling the stock would result in a reduction of Scrumptious's operating income by $187, therefore, Scrumptious should not sell the stock o C. The analysis is flawed. Joint costs are always irrelevant in a process further decision Only incremental costs and revenues past the splito powtare relevant in this case, then, the revenues, $22,500, and the incremental costs, $10,000 from selling the stock result in an increase in Scrumptious's operating income of $12,500. Therefore, Scrumptious should sell the stock O D As exemplified in requirement 1. the different cost allocation methods results in different margins reported by each of the products over the same accounting period. Because of these differences, Dong must examine the affect on operating income from selling the stock product under multiple cost allocations methods prior to determining whether or not the company should sell the product sla What do you think of her analysis? Should Scrumptious sell the stock? d O A. The analysis is flawed. Marketing costs are irrelevant to the decision. Only incremental costs and revenues prior to the splitoff point are relevant in this case, then, the revenues, $22.500, and the joint costs $12,687, from selling the stock result in an increase in Scrumptious's operating income of $9,813 Therefore, Scrumptious should sell the stock O B. Allocating joint costs to products according to the sales value at splitoff is a valid method of cost allocation Based on Dong's analysis using the sales value at splitoff method, selling the stock would result in a reduction of Scrumptious's operating income by $187, therefore, Scrumptious should not sell the stock o C. The analysis is flawed. Joint costs are always irrelevant in a process further decision Only incremental costs and revenues past the splito powtare relevant in this case, then, the revenues, $22,500, and the incremental costs, $10,000 from selling the stock result in an increase in Scrumptious's operating income of $12,500. Therefore, Scrumptious should sell the stock O D As exemplified in requirement 1. the different cost allocation methods results in different margins reported by each of the products over the same accounting period. Because of these differences, Dong must examine the affect on operating income from selling the stock product under multiple cost allocations methods prior to determining whether or not the company should sell the product sla
