Question 1

By-products are

Accepted Answer

A)  items resulting from a joint process that have no further value. 
B)  not sufficient alone, in terms of sales value, for management to justify undertaking the joint process. 
C)  also known as scrap. 
D)  the primary reason management undertook the production process. 
A)  items resulting from a joint process that have no further value. 
B)  not sufficient alone, in terms of sales value, for management to justify undertaking the joint process. 
C)  also known as scrap. 
D)  the primary reason management undertook the production process.

Question 2

The definition of a sunk cost is

Accepted Answer

A)  a cost that cannot be recovered regardless of what happens. 
B)  a cost that relates to money poured into the ground. 
C)  considered the original cost of an item. 
D)  also known as an opportunity cost. 
A)  a cost that cannot be recovered regardless of what happens. 
B)  a cost that relates to money poured into the ground. 
C)  considered the original cost of an item. 
D)  also known as an opportunity cost.

Question 3

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 sales value at split-off?

Accepted Answer

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

Question 4

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 G?

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 5

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 sales value at split-off, what amount of joint processing cost is allocated to Product X (round to the nearest dollar)?

Accepted Answer

A)  $5,500 
B)  $2,500 
C)  $4,000 
D)  $3,243 
A)  $5,500 
B)  $2,500 
C)  $4,000 
D)  $3,243

Question 6

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 sales value at split-off, what amount of joint processing cost is allocated to Product G?

Accepted Answer

A)  $4,433 
B)  $1,182 
C)  $1,108 
D)  $2,276 
A)  $4,433 
B)  $1,182 
C)  $1,108 
D)  $2,276

Question 7

Why is the net realizable value of scrap used to lower estimated overhead costs in setting a predetermined overhead rate in a job order costing situation in which scrap is expected on most jobs?

Accepted Answer

The net realizable value of scrap is use

Question 8

In a joint costing process, which of the following would not be considered a sunk cost?

Accepted Answer

A)  direct material cost 
B)  direct labor cost 
C)  joint cost 
D)  costs incurred to further refine a product created by the process 
A)  direct material cost 
B)  direct labor cost 
C)  joint cost 
D)  costs incurred to further refine a product created by the process

Question 9

Johnson Company Ellis Company produces two products from a joint process: A and C. Joint processing costs for this production cycle are $9,000.
  If A and C are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Johnson Company. Using net realizable value at split-off, what amount of joint processing cost is allocated to Product C (round to the nearest dollar)?

Accepted Answer

A)  $2,718 
B)  $4,500 
C)  $6,062 
D)  $6,282 
A)  $2,718 
B)  $4,500 
C)  $6,062 
D)  $6,282

Question 10

The net realizable value approach mandates that the NRV of the by-products/scrap be treated as

Accepted Answer

A)  an increase in joint costs. 
B)  a sunk cost. 
C)  a reduction of joint costs. 
D)  a cost that can be ignored totally. 
A)  an increase in joint costs. 
B)  a sunk cost. 
C)  a reduction of joint costs. 
D)  a cost that can be ignored totally.

Question 11

The net realizable value approach is used to account for scrap and by-products when the net realizable value is significant.

Accepted Answer

A) True 
 B)False

Question 12

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 Z (round to the nearest dollar)?

Accepted Answer

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

Question 13

Joint costs may be allocated to by-products as well as primary products.

Accepted Answer

A) True 
 B)False

Question 14

A product may be processed beyond the split-off point if management believes that

Accepted Answer

A)  its marketability will be enhanced. 
B)  the incremental cost of further processing will be less than the incremental revenue of further processing. 
C)  the joint cost assigned to it is not already greater than its prospective selling price. 
D)  both a and b. 
A)  its marketability will be enhanced. 
B)  the incremental cost of further processing will be less than the incremental revenue of further processing. 
C)  the joint cost assigned to it is not already greater than its prospective selling price. 
D)  both a and b.

Question 15

Incremental revenues and costs need to be considered when using which allocation method?

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 16

A single process in which one product cannot be manufactured without producing others is referred to as a _________________________.

Accepted Answer

The answer of A single process in which one product...

Question 17

Johnson Company Ellis Company produces two products from a joint process: A and C. Joint processing costs for this production cycle are $9,000.
  If A and C are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Johnson Company. Using sales value at split-off, what amount of joint processing cost is allocated to Product C (round to the nearest dollar)?

Accepted Answer

A)  $2,938 
B)  $3,682 
C)  $4,500 
D)  $6,062 
A)  $2,938 
B)  $3,682 
C)  $4,500 
D)  $6,062

Question 18

Kellman Company Kellman Company manufactures products X and Y from a joint process that also yields a by-product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional information is as follows:
  Joint costs were allocated using the sales value at split-off approach.
Refer to Kellman Company. The joint costs allocated to product X were

Accepted Answer

A)  $ 84,000 
B)  $100,800. 
C)  $150,000. 
D)  $168,000. 
A)  $ 84,000 
B)  $100,800. 
C)  $150,000. 
D)  $168,000.

Question 19

Which of the following has sales value?

Accepted Answer

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

Question 20

Approximated net realizable value at split-off for joint products is computed as

Accepted Answer

A)  selling price at split-off minus further processing and disposal costs. 
B)  final selling price minus further processing and disposal costs. 
C)  selling price at split-off minus allocated joint processing costs. 
D)  final selling price minus a normal profit margin. 
A)  selling price at split-off minus further processing and disposal costs. 
B)  final selling price minus further processing and disposal costs. 
C)  selling price at split-off minus allocated joint processing costs. 
D)  final selling price minus a normal profit margin.

By-products are

The definition of a sunk cost is

Why is the net realizable value of scrap used to lower estimated overhead costs in setting a predetermined overhead rate in a job order costing situation in which scrap is expected on most jobs?

In a joint costing process, which of the following would not be considered a sunk cost?

The net realizable value approach mandates that the NRV of the by-products/scrap be treated as

The net realizable value approach is used to account for scrap and by-products when the net realizable value is significant.

Joint costs may be allocated to by-products as well as primary products.

A product may be processed beyond the split-off point if management believes that

Incremental revenues and costs need to be considered when using which allocation method?

A single process in which one product cannot be manufactured without producing others is referred to as a _________________________.

Which of the following has sales value?

Approximated net realizable value at split-off for joint products is computed as

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

By-products are

The definition of a sunk cost is

Why is the net realizable value of scrap used to lower estimated overhead costs in setting a predetermined overhead rate in a job order costing situation in which scrap is expected on most jobs?

In a joint costing process, which of the following would not be considered a sunk cost?

The net realizable value approach mandates that the NRV of the by-products/scrap be treated as

The net realizable value approach is used to account for scrap and by-products when the net realizable value is significant.

Joint costs may be allocated to by-products as well as primary products.

A product may be processed beyond the split-off point if management believes that

Incremental revenues and costs need to be considered when using which allocation method?

A single process in which one product cannot be manufactured without producing others is referred to as a _________________________.

Which of the following has sales value?

Approximated net realizable value at split-off for joint products is computed as

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