Question 1

Joint costs include all materials, labor and overhead that are incurred before the split-off point.

Accepted Answer

A) True 
 B)False

Question 2

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 approximated net realizable value at split-off, what amount of joint processing cost is allocated to Product A (round to the nearest dollar)?

Accepted Answer

A)  $2,718 
B)  $2,934 
C)  $3,014 
D)  $4,500 
A)  $2,718 
B)  $2,934 
C)  $3,014 
D)  $4,500

Question 3

Monetary allocation measures recognize the revenue generating ability of each product in a joint process.

Accepted Answer

A) True 
 B)False

Question 4

Joint cost allocation is useful for

Accepted Answer

A)  decision making. 
B)  product costing. 
C)  control. 
D)  evaluating managers' performance. 
A)  decision making. 
B)  product costing. 
C)  control. 
D)  evaluating managers' performance.

Question 5

If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n)

Accepted Answer

A)  mixed cost process. 
B)  joint process. 
C)  extractive process. 
D)  reduction process. 
A)  mixed cost process. 
B)  joint process. 
C)  extractive process. 
D)  reduction process.

Question 6

For purposes of allocating joint costs to joint products using the relative sales value at split-off method, the costs beyond split-off

Accepted Answer

A)  are allocated in the same manner as the joint costs. 
B)  are deducted from the relative sales value at split-off. 
C)  are deducted from the sales value at the point of sale. 
D)  do not affect the allocation of the joint costs. 
A)  are allocated in the same manner as the joint costs. 
B)  are deducted from the relative sales value at split-off. 
C)  are deducted from the sales value at the point of sale. 
D)  do not affect the allocation of the joint costs.

Question 7

Allocating joint costs based upon a physical measure considers the revenue-generating ability of individual products.

Accepted Answer

A) True 
 B)False

Question 8

Briefly discuss the four decisions that management must make concerning joint processes.

Accepted Answer

The four decisions that managers must ma

Question 9

Not-for-profit entities are required to allocate joint costs among fund-raising, program, and administrative functions.

Accepted Answer

A) True 
 B)False

Question 10

Under an acceptable method of costing by-products, inventory costs of the by-product are based on the portion of the joint production cost allocated to the by-product

Accepted Answer

A)  but any subsequent processing cost is debited to the cost of the main product. 
B)  but any subsequent processing cost is debited to revenue of the main product. 
C)  plus any subsequent processing cost. 
D)  minus any subsequent processing cost. 
A)  but any subsequent processing cost is debited to the cost of the main product. 
B)  but any subsequent processing cost is debited to revenue of the main product. 
C)  plus any subsequent processing cost. 
D)  minus any subsequent processing cost.

Question 11

If incremental revenues beyond split-off are less than incremental costs, a product should be sold at the split-off point.

Accepted Answer

A) True 
 B)False

Question 12

If incremental revenues beyond split-off exceed incremental costs, a product should be processed further.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is/are synonyms for joint products?

Accepted Answer

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

Question 14

Net realizable value equals product sales revenue at split-off plus any costs necessary to prepare and dispose of the product.

Accepted Answer

A) True 
 B)False

Question 15

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 a physical measure, what amount of joint processing cost is allocated to Product A (round to the nearest dollar)?

Accepted Answer

A)  $2,938 
B)  $3,682 
C)  $4,500 
D)  $5,318 
A)  $2,938 
B)  $3,682 
C)  $4,500 
D)  $5,318

Question 16

Which of the following is a commonly used joint cost allocation method?

Accepted Answer

A)  high-low method 
B)  regression analysis 
C)  approximated sales value at split-off method 
D)  weighted average quantity technique 
A)  high-low method 
B)  regression analysis 
C)  approximated sales value at split-off method 
D)  weighted average quantity technique

Question 17

A decision that must be made at split-off is to sell a product or process it further.

Accepted Answer

A) True 
 B)False

Question 18

Davis Company Davis Company produces three products: A, B, and C from the same process. Joint costs for this production run are $2,100.
  If the products are processed further, Davis Company will incur the following disposal costs upon sale: A, $3.00; B, $2.00; and C, $1.00.
Refer to Davis 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)  $959 
B)  $725 
C)  $700 
D)  $416 
A)  $959 
B)  $725 
C)  $700 
D)  $416

Question 19

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 Y 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 20

Waste created by a production process is

Accepted Answer

A)  accounted for in the same manner as defective units. 
B)  accounted for as an abnormal loss. 
C)  material that can be sold as an irregular product. 
D)  discarded rather than sold. 
A)  accounted for in the same manner as defective units. 
B)  accounted for as an abnormal loss. 
C)  material that can be sold as an irregular product. 
D)  discarded rather than sold.

Joint costs include all materials, labor and overhead that are incurred before the split-off point.

Monetary allocation measures recognize the revenue generating ability of each product in a joint process.

Joint cost allocation is useful for

If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n)

For purposes of allocating joint costs to joint products using the relative sales value at split-off method, the costs beyond split-off

Allocating joint costs based upon a physical measure considers the revenue-generating ability of individual products.

Briefly discuss the four decisions that management must make concerning joint processes.

Not-for-profit entities are required to allocate joint costs among fund-raising, program, and administrative functions.

Under an acceptable method of costing by-products, inventory costs of the by-product are based on the portion of the joint production cost allocated to the by-product

If incremental revenues beyond split-off are less than incremental costs, a product should be sold at the split-off point.

If incremental revenues beyond split-off exceed incremental costs, a product should be processed further.

Which of the following is/are synonyms for joint products?

Net realizable value equals product sales revenue at split-off plus any costs necessary to prepare and dispose of the product.

Which of the following is a commonly used joint cost allocation method?

A decision that must be made at split-off is to sell a product or process it further.

Waste created by a production process is

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

Joint costs include all materials, labor and overhead that are incurred before the split-off point.

Monetary allocation measures recognize the revenue generating ability of each product in a joint process.

Joint cost allocation is useful for

If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n)

For purposes of allocating joint costs to joint products using the relative sales value at split-off method, the costs beyond split-off

Allocating joint costs based upon a physical measure considers the revenue-generating ability of individual products.

Briefly discuss the four decisions that management must make concerning joint processes.

Not-for-profit entities are required to allocate joint costs among fund-raising, program, and administrative functions.

Under an acceptable method of costing by-products, inventory costs of the by-product are based on the portion of the joint production cost allocated to the by-product

If incremental revenues beyond split-off are less than incremental costs, a product should be sold at the split-off point.

If incremental revenues beyond split-off exceed incremental costs, a product should be processed further.

Which of the following is/are synonyms for joint products?

Net realizable value equals product sales revenue at split-off plus any costs necessary to prepare and dispose of the product.

Which of the following is a commonly used joint cost allocation method?

A decision that must be made at split-off is to sell a product or process it further.

Waste created by a production process is

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