Final answer:
The answer is (a) true. Joint product costs occur when multiple end products are produced simultaneously and these costs cannot be attributed to a single product. They are common in scenarios where economies of scale are sought.
Step-by-step explanation:
The student's question is about joint product costs, which are indeed common costs incurred during the production of multiple products simultaneously. The statement is correct; hence, the answer to the question is (a) true. When a manufacturing process yields multiple end products from the same input, the costs incurred to process these inputs until the split-off point are considered joint product costs. These costs cannot be readily attributed to any single product and are instead apportioned among the products typically based on certain allocation bases such as weight, volume, or market value.
Joint product costs are prevalent in industries where economies of scale can be achieved, as they allow firms to spread the fixed costs over a larger volume of output. This leads to a decline in the average costs of production as output increases, demonstrating the concept of economies of scale. However, a firm may also experience diseconomies of scale if the average cost of production starts to rise with further increases in output.