Question 1

Each of the following is a method to allocate joint costs except

Accepted Answer

A)  relative sales value. 
B)  relative net realizable value. 
C)  relative weight, volume, or linear measure. 
D)  average unit cost. 
A)  relative sales value. 
B)  relative net realizable value. 
C)  relative weight, volume, or linear measure. 
D)  average unit cost. D

Question 2

While preparing a salad, the chef removes the core from a head of lettuce. This core would be classified as

Accepted Answer

A)  defective. 
B)  shrinkage. 
C)  waste. 
D)  scrap. 
A)  defective. 
B)  shrinkage. 
C)  waste. 
D)  scrap. C

Question 3

Which of the following components of production are allocable as joint costs when a single manufacturing process produces several salable products?

Accepted Answer

A)  direct material, direct labor, and overhead 
B)  direct material and direct labor only 
C)  direct labor and overhead only 
D)  overhead and direct material only 
A)  direct material, direct labor, and overhead 
B)  direct material and direct labor only 
C)  direct labor and overhead only 
D)  overhead and direct material only A

Question 4

Kelly Company Kelly Company is placing an ad in the local paper to advertise its products. The ad will run for one week at a total cost of $5,500. Kelly Company has four categories of products as follows:
  Refer to Kelly Company. What amount of advertising cost should be allocated to hardware, assuming Kelly allocates based on percent of floor space occupied?

Accepted Answer

A)  $1,375 
B)  $1,100 
C)  $2,475 
D)  $ 825 
A)  $1,375 
B)  $1,100 
C)  $2,475 
D)  $ 825

Question 5

Briefly discuss the net realizable value at split-off point method of allocating joint costs.

Accepted Answer

The net realizable value at split-off me

Question 6

Scrap is defined as a

Accepted Answer

A)  finished unit of product that has no sales value. 
B)  residual of the production process that has limited sales value. 
C)  residual of the production process that can be reworked for sale as an irregular unit of product. 
D)  residual of the production process that has no sales value. 
A)  finished unit of product that has no sales value. 
B)  residual of the production process that has limited sales value. 
C)  residual of the production process that can be reworked for sale as an irregular unit of product. 
D)  residual of the production process that has no sales value.

Question 7

Joint costs are allocated to which of the following products?

Accepted Answer

A)  yes yes 
B)  yes no 
C)  no no 
D)  no yes 
A)  yes yes 
B)  yes no 
C)  no no 
D)  no yes

Question 8

Discuss briefly the three monetary measurement techniques of joint cost allocation.

Accepted Answer

The sales value at split-off method assi

Question 9

Under the realized value approach, no value is recognized for by-products or scrap until they are actually sold.

Accepted Answer

A) True 
 B)False

Question 10

Sun Glo Company Sun Glo Company produces three products from the same process that has joint processing costs of $4,100. Products R, S, and T are produced in the following quantities: 250 gallons, 400 gallons, and 750 gallons. Sun Glo Company also incurred advertising costs of $60,000. The ad was used to run sales for all three products. The three products occupy floor space in the following ratio: 5:4:9. (Round all answers to the nearest dollar.)
Refer to Sun Glo Company. Using gallons as the physical measurement, what amount of joint processing cost is allocated to Product R?

Accepted Answer

A)  $2,196 
B)  $1,171 
C)  $1,367 
D)  $ 732 
A)  $2,196 
B)  $1,171 
C)  $1,367 
D)  $ 732

Question 11

Ellis Company Ellis Company produces two products from a joint process: X and Z. Joint processing costs for this production cycle are $8,000.
  If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Ellis Company. Using net realizable value at split-off, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)?

Accepted Answer

A)  $4,000 
B)  $5,610 
C)  $2,390 
D)  $5,500 
A)  $4,000 
B)  $5,610 
C)  $2,390 
D)  $5,500

Question 12

Briefly discuss the restrictions and requirements on service organizations and not-for-profits that relate to joint cost allocation.

Accepted Answer

Service and not-for-profit organizations

Question 13

Sherman Company produces two main products jointly, A and B, and C, which is a by-product of B.
Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B. Data for April were as follows:
   Required: Determine the gross profit for April.

Accepted Answer

The answer of Sherman Company produces two main products jointly,...

Question 14

Brite Surface Company Brite Surface Company produces four floor cleaners from the same process: C, D, E, and G. Joint product costs are $9,000. (Round all answers to the nearest dollar.)
  If Brite Surface sells the products after further processing, the following disposal costs will be incurred: C, $2.50; D, $1.00; E, $3.50; G, $6.00.
Refer to Brite Surface Company. Using a physical measurement method, what amount of joint processing cost is allocated to Product C?

Accepted Answer

A)  $3,495 
B)  $2,447 
C)  $1,748 
D)  $1,311 
A)  $3,495 
B)  $2,447 
C)  $1,748 
D)  $1,311

Question 15

Ellis Company Ellis Company produces two products from a joint process: X and Z. Joint processing costs for this production cycle are $8,000.
  If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Ellis Company. Using a physical measure, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)?

Accepted Answer

A)  $4,000 
B)  $4,757 
C)  $5,500 
D)  $3,243 
A)  $4,000 
B)  $4,757 
C)  $5,500 
D)  $3,243

Question 16

Borel Company
Borel Company produces three products from the same process and incurs joint processing costs of $3,000.
   Disposal costs for the products if they are processed further are:
M, $3.00; N, $5.50; Q, $1.00.
Refer to Borel Company. What amount of joint processing cost is allocated to the three products using net realizable value at split-off?

Accepted Answer

The answer of Borel Company
Borel Company produces three products from...

Question 17

Chambers Company
Chambers Company produces only two products and incurs joint processing costs that total $3,750. Products Alpha and Beta are produced in the following quantities during each month: 4,500 and 6,000 gallons, respectively. Chambers Company also runs one ad each month that advertises both products at a cost of $1,500. The selling price per gallon for the two products are $20 and $17.50, respectively.
Refer to Chambers Company. What amount of joint processing costs is allocated to each product based on gallons produced?

Accepted Answer

A = 4,500/10,500 ´ $

Question 18

Ellis Company Ellis Company produces two products from a joint process: X and Z. Joint processing costs for this production cycle are $8,000.
  If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Ellis Company. Using a physical measure, what amount of joint processing cost is allocated to Product Z (round to the nearest dollar)?

Accepted Answer

A)  $4,000 
B)  $3,243 
C)  $5,500 
D)  $4,757 
A)  $4,000 
B)  $3,243 
C)  $5,500 
D)  $4,757

Question 19

In a lumber mill, which of the following would most likely be considered a primary product?

Accepted Answer

A)  2 ´ 4 studs 
B)  sawdust 
C)  wood chips 
D)  tree bark 
A)  2 ´ 4 studs 
B)  sawdust 
C)  wood chips 
D)  tree bark

Question 20

Two methods of allocating joint costs to products are physical measure allocation and monetary allocation.

Accepted Answer

A) True 
 B)False

Each of the following is a method to allocate joint costs except

While preparing a salad, the chef removes the core from a head of lettuce. This core would be classified as

Which of the following components of production are allocable as joint costs when a single manufacturing process produces several salable products?

Briefly discuss the net realizable value at split-off point method of allocating joint costs.

Scrap is defined as a

Joint costs are allocated to which of the following products?

Discuss briefly the three monetary measurement techniques of joint cost allocation.

Under the realized value approach, no value is recognized for by-products or scrap until they are actually sold.

Briefly discuss the restrictions and requirements on service organizations and not-for-profits that relate to joint cost allocation.

In a lumber mill, which of the following would most likely be considered a primary product?

Two methods of allocating joint costs to products are physical measure allocation and monetary allocation.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Introduction to Cost Management Systems

Responsibility Accounting, Support Department Allocations, and Transfer Pricing

Performance Measurement, Balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 11: Allocation of Joint Costs and Accounting for By-Products

Each of the following is a method to allocate joint costs except

While preparing a salad, the chef removes the core from a head of lettuce. This core would be classified as

Which of the following components of production are allocable as joint costs when a single manufacturing process produces several salable products?

Briefly discuss the net realizable value at split-off point method of allocating joint costs.

Scrap is defined as a

Joint costs are allocated to which of the following products?

Discuss briefly the three monetary measurement techniques of joint cost allocation.

Under the realized value approach, no value is recognized for by-products or scrap until they are actually sold.

Briefly discuss the restrictions and requirements on service organizations and not-for-profits that relate to joint cost allocation.

In a lumber mill, which of the following would most likely be considered a primary product?

Two methods of allocating joint costs to products are physical measure allocation and monetary allocation.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Introduction to Cost Management Systems

Responsibility Accounting, Support Department Allocations, and Transfer Pricing

Performance Measurement, Balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters