Exam 7: Cost Allocation: Departments, Joint Products, and By-Products

Firm X has a production process that has a total joint cost of $15,000. At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1 using the physical measure method?

The amount of joint costs allocated to product Z using the sales value at split-off method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

The total cost accumulated in the sales department using the direct method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

The total cost accumulated in the assembly department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

The total cost accumulated in the marketing department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

The amount of joint costs allocated to product X using the net realizable value method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

The amount of joint costs allocated to product X using the sales value at split-off method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

An overhead cost that can be traced directly to either a service or production department:

The departmental cost allocation approach is preferred when the firm has:

Which one of the following methods uses units of output to allocate joint costs to joint products?

The mathematical technique that underlies the reciprocal cost allocation method is:

Which of the following is not an ethical issue managers encounter with cost allocation?

In making decisions about whether to sell or further process joint products, allocation of common or joint costs is:

Which one of the following methods of cost allocation is completed by taking the service flows to production departments only and determining each production department's share of that service?

When significant differences exist in costs allocated to production departments, cost management should use what method to find a more accurate cost allocation?