Question 1

The challenge of a production facility that is producing several products from is how to allocate the joint costs that are incurred ________.

Accepted Answer

A)  before the split-off point 
B)  after the split-off point 
C)  at the split-off point 
D)  at the end of production 
A)  before the split-off point 
B)  after the split-off point 
C)  at the split-off point 
D)  at the end of production

Question 2

The Brital Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:
Direct Materials processed:33,000 gallons
 
The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 33,000 gallons of saleable product was $55,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. Which of the following statements is true of Brital?

Accepted Answer

A)  The gross profit percent of condensed milk is lower than the gross profit of butter cream. 
B)  The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point. 
C)  The gross profit of condensed milk is lower than the gross profit of butter cream. 
D)  The gross margin is allocated to the joint products in order to determine the joint-cost allocations. 
A)  The gross profit percent of condensed milk is lower than the gross profit of butter cream. 
B)  The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point. 
C)  The gross profit of condensed milk is lower than the gross profit of butter cream. 
D)  The gross margin is allocated to the joint products in order to determine the joint-cost allocations.

Question 3

Outputs with a negative sales value because of disposal costs have which of the following impact on costs?

Accepted Answer

A)  added to cost of goods sold 
B)  added to joint production costs and allocated to joint or main products 
C)  added to joint production costs and allocated to byproducts and scrap 
D)  subtracted from product revenue 
A)  added to cost of goods sold 
B)  added to joint production costs and allocated to joint or main products 
C)  added to joint production costs and allocated to byproducts and scrap 
D)  subtracted from product revenue

Question 4

When the selling prices of all products at the split-off point are unavailable, the ________ is the best alternative for allocating joint costs.

Accepted Answer

A)  sales value at split-off method 
B)  NRV method 
C)  physical measures method 
D)  constant gross-margin percentage method 
A)  sales value at split-off method 
B)  NRV method 
C)  physical measures method 
D)  constant gross-margin percentage method

Question 5

Explain why some companies choose not to allocate joint costs to products.

Accepted Answer

Some companies choose not to allocate jo

Question 6

A company produces three products from a joint production process:: A, B, and C. As a percentage of total sales value, a represents 50%, B 49.5%, and C .5%. Product C could be considered a ________.

Accepted Answer

A)  primary product 
B)  main product 
C)  byproduct 
D)  waste product 
A)  primary product 
B)  main product 
C)  byproduct 
D)  waste product

Question 7

When a product is the result of a joint process, the decision to process the product past the split-off point further should be influenced by which of the following measures?

Accepted Answer

A)  the product's proportion of the total costs 
B)  the portion of the joint costs allocated to the individual products 
C)  the extra revenue earned past the split-off point 
D)  the incremental operating income earned past the split-off point 
A)  the product's proportion of the total costs 
B)  the portion of the joint costs allocated to the individual products 
C)  the extra revenue earned past the split-off point 
D)  the incremental operating income earned past the split-off point

Question 8

An example of allocating joint costs using physical measures is allocating joint costs based on the ________.

Accepted Answer

A)  sales value at split-off point 
B)  volume of the products produced 
C)  constant gross-margin percentage 
D)  net realizable value 
A)  sales value at split-off point 
B)  volume of the products produced 
C)  constant gross-margin percentage 
D)  net realizable value

Question 9

The drawback of the constant gross-margin percentage NRV method in joint costing is that it ________.

Accepted Answer

A)  recognizes that profits are derived from the costs incurred after split-off 
B)  assumes the profit margin to be identical across all products 
C)  attempts to approximate the sales values at split-off by subtracting from final selling prices the separable costs incurred after the split-off point 
D)  ignores the separable costs of further processing 
A)  recognizes that profits are derived from the costs incurred after split-off 
B)  assumes the profit margin to be identical across all products 
C)  attempts to approximate the sales values at split-off by subtracting from final selling prices the separable costs incurred after the split-off point 
D)  ignores the separable costs of further processing

Question 10

Explain why some companies carry their inventories at NRV minus an estimated operating income margin instead of the NRV itself.

Accepted Answer

Some companies carry their inventories a

Question 11

The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:
Direct Materials processed:23,000 gallons (after shrinkage)
 
The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 23,000 gallons of saleable product was $48,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. Which of the following statements is true of Kenton's joint cost allocations?

Accepted Answer

A)  The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point. 
B)  One product can receive negative joint costs allocations to bring the other unprofitable product to the overall average gross margin. 
C)  Kenton has chosen the easiest method for allocating its joint costs of production. 
D)  The gross profit percent of condensed milk is lower than the gross profit of butter cream. 
A)  The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point. 
B)  One product can receive negative joint costs allocations to bring the other unprofitable product to the overall average gross margin. 
C)  Kenton has chosen the easiest method for allocating its joint costs of production. 
D)  The gross profit percent of condensed milk is lower than the gross profit of butter cream.

The challenge of a production facility that is producing several products from is how to allocate the joint costs that are incurred ________.

Outputs with a negative sales value because of disposal costs have which of the following impact on costs?

When the selling prices of all products at the split-off point are unavailable, the ________ is the best alternative for allocating joint costs.

Explain why some companies choose not to allocate joint costs to products.

A company produces three products from a joint production process:: A, B, and C. As a percentage of total sales value, a represents 50%, B 49.5%, and C .5%. Product C could be considered a ________.

When a product is the result of a joint process, the decision to process the product past the split-off point further should be influenced by which of the following measures?

An example of allocating joint costs using physical measures is allocating joint costs based on the ________.

The drawback of the constant gross-margin percentage NRV method in joint costing is that it ________.

Explain why some companies carry their inventories at NRV minus an estimated operating income margin instead of the NRV itself.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 16: Cost Allocation: Joint Products and Byproducts

The challenge of a production facility that is producing several products from is how to allocate the joint costs that are incurred ________.

Outputs with a negative sales value because of disposal costs have which of the following impact on costs?

When the selling prices of all products at the split-off point are unavailable, the ________ is the best alternative for allocating joint costs.

Explain why some companies choose not to allocate joint costs to products.

A company produces three products from a joint production process:: A, B, and C. As a percentage of total sales value, a represents 50%, B 49.5%, and C .5%. Product C could be considered a ________.

When a product is the result of a joint process, the decision to process the product past the split-off point further should be influenced by which of the following measures?

An example of allocating joint costs using physical measures is allocating joint costs based on the ________.

The drawback of the constant gross-margin percentage NRV method in joint costing is that it ________.

Explain why some companies carry their inventories at NRV minus an estimated operating income margin instead of the NRV itself.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters