Which of the following costs is not relevant to the decision to sell product at split

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Right answer: Option A-Only I

Explanation:

Relevant costs are those that are incurred when a decision has been made and are thus relevant to that decision.In this case,costs incurred after the split off decision will only be relevant in this situation since they were incurred after the decision to split off.As a result, it is a relevant cost for selling or processing further decisions.

Explanation for incorrect options:

Option (A): Cost incurred before split cost is not relevant as it is sunk cost.

Option (C): Statement I is correct whereas statement II is incorrect as the fixed production cost is considered as sunk cost.

Option (D): Statement I is correct as variable production cost is the relevant cost for selling or processing further decisions but the statement II is incorrect.

A)joint costs allocated to the productB)the selling price of the product at split-offC)the additional processing costs after split-offD)the selling price of the product after further processing

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