A company is deciding whether to sell a joint product at the split-off point or to process it further. In making this decision, how should the joint costs incurred before the split-off point be treated?

Correct answer: B) They should be treated as sunk costs and ignored in the decision.

Explanation

When deciding whether to process a joint product further, joint costs already incurred up to the split-off point are past, sunk costs. The decision must be based solely on whether the incremental revenue from further processing exceeds the incremental costs of further processing.