Answer (A) is correct . Joint costs incurred prior to the split-off point are not relevant to the decision whether or not to process further because they have already been incurred, i.e., they are sunk costs.
Answer (B) is incorrect because Joint costs incurred prior to the split-off point are not relevant.
Answer (C) is incorrect because Joint costs incurred prior to the split-off point are sunk costs, not standard costs.
Answer (D) is incorrect because Differential costs are costs that vary between alternatives.
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