Final answer:
Joint production costs are sunk costs incurred before the split-off point and are not relevant for decisions made after this point. Instead, decisions should be based on additional costs and revenue beyond the split-off point.
Step-by-step explanation:
The statement that joint production costs are relevant costs in decisions about what to do with a product from the split-off point onward in the production process is false. Joint production costs are incurred before the split-off point and are sunk costs; they cannot be changed by any decision made after the split-off point. Decisions post split-off should be based on the additional costs that will be incurred and the additional revenue that can be generated from that point forward. Therefore, decisions regarding further processing or the sale of products beyond the split-off point should focus on relevant costs like separate processing costs and opportunity costs.
In the context of production and cost analysis in business, the production function outlines how inputs are converted into outputs, and total cost captures the sum of all costs involved in producing and selling products. It's essential to distinguish between fixed costs, which do not change with production levels, and variable costs, which are directly related to the production volume. Understanding these concepts is crucial for making informed financial decisions about production processes, especially in complex scenarios involving joint products.