Question 1

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 2

The net realizable value approach is normally used when the NRV is expected to be
$\text {\underline{ insigificant} }$                                            $\text {\underline{ significant} }$

Accepted Answer

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

Question 3

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 4

When allocating joint process cost based on tons of output,all products will

Accepted Answer

A) be salable at split-off. 
B) have the same joint cost per ton. 
C) have a sales value greater than their costs. 
D) have no disposal costs at the split-off point. 
A) be salable at split-off. 
B) have the same joint cost per ton. 
C) have a sales value greater than their costs. 
D) have no disposal costs at the split-off point.

Question 5

Chambers Company
Chambers Company produces two products from a joint process: X and Z.Joint processing costs for this production cycle are $8,000.
                     Yards        Sales price per yard at split-off       Disposal cost per yard at split-off      Further processing per yard        Final sale price per yard                 X       1,500       $6.00       $3.50       $1.00       $ 7.50               Y       2,200        9.00        5.00        3.00        11.25      
If X and Z are processed further,no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Chambers Company.Using approximated 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) $3,090 
B) $5,204 
C) $4,000 
D) $2,390 
A) $3,090 
B) $5,204 
C) $4,000 
D) $2,390

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Shiny Floors Company
Shiny Floors 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. )
                   Barrels          Sales price per barrel at split-off      Disposal cost per barrel at split-off          Further processing costs       Final sales price per barrel              C         750       $10.00       $6.50       $2.00       $13.50               D       1,000        8.00       4.00       2.50       10.00               E       1,400        11.00       7.00       4.00       15.50               G       2,000      15.00        9.50       4.50       19.50      
If Shiny Floors 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 Shiny Floors Company.Using net realizable value at split-off,what amount of joint processing cost is allocated to Product G?

Accepted Answer

A) $1,017 
B) $1,550 
C) $2,170 
D) $4,263 
A) $1,017 
B) $1,550 
C) $2,170 
D) $4,263

Question 8

Joint costs are most frequently allocated based upon relative

Accepted Answer

A) profitability. 
B) conversion costs. 
C) prime costs. 
D) sales value. 
A) profitability. 
B) conversion costs. 
C) prime costs. 
D) sales value.

Question 9

The method of pricing by-products/scrap where no value is assigned to these items until they are sold is known as the

Accepted Answer

A) net realizable value at split-off point method. 
B) sales value at split-off method. 
C) realized value approach. 
D) approximated net realizable value at split-off methoD. 
A) net realizable value at split-off point method. 
B) sales value at split-off method. 
C) realized value approach. 
D) approximated net realizable value at split-off methoD.

Question 10

Industrial Solutions Company
Industrial Solutions 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.Industrial Solutions 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 Industrial Solutions Company.Using gallons as the physical measurement,what amount of joint processing cost is allocated to Product T?

Accepted Answer

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

Question 11

Joint costs are allocated to joint products to

Accepted Answer

A) obtain a cost per unit for financial statement purposes. 
B) provide accurate management information on production costs of each type of product. 
C) compute variances from expected costs for each joint product. 
D) allow the use of high-low analysis by the company. 
A) obtain a cost per unit for financial statement purposes. 
B) provide accurate management information on production costs of each type of product. 
C) compute variances from expected costs for each joint product. 
D) allow the use of high-low analysis by the company.

Question 12

Relative sales value at split-off is used to allocate
$\text {\underline{ cossts beyond split-off} }$                                        $\text {\underline{ joint costs} }$

Accepted Answer

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

Question 13

Riley Company
Riley Company produces two products from a joint process: A and C.Joint processing costs for this production cycle are $9,000.
                     Yards        Sales price per yard at split-off      Disposal cost per yard at split-off        Further processing per yard          Final sale price per yard               A       1,800       $7.00       $4.50       $1.50       $ 8.00               C       2,600        10.00        6.00        3.50        12.25      
If A and C are processed further,no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Riley Company.Using 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) $4,500 
C) $6,062 
D) $6,282 
A) $2,718 
B) $4,500 
C) $6,062 
D) $6,282

Question 14

Detroit Manufacturing Company makes three products: A and B are considered main products and C a by-product.
Production and sales for the year were:
220,000 lbs.of Product A,salable at $6.00
180,000 lbs.of Product B,salable at $3.00
50,000 lbs.of Product C,salable at $.90
Production costs for the year:
 Joint costs                                                              $ \$ 276,600 $
$\text { Costs after separation: }$
Product A                                                                  320,000
Product B                                                                  190,000
Product C                                                                  6,900 
Required:Using the by-product revenue as a cost reduction and net realizable value method of assigning joint costs,compute unit costs (a)if C is a by-product of the process and (b)if C is a by-product of B.

Accepted Answer

Required:Using the by-product revenue as

Question 15

Victoria Company
Victoria Company manufactures three products in a joint process which costs $25,000.Each product can be sold at split-off or processed further and then sold.10,000 units of each product are manufactured.The following information is available for the three products:
              Product       Sales Value at Split-off       Separable Processing Costs after Split-off        Sales Value at Completion               A       $12       $9       $21              B      10       4       17               C       15       6       19      
Refer to Victoria Company.If Product A is processed beyond the split-off point,profit will:

Accepted Answer

A) increase by $210,000 
B) increase by $120,000 
C) increase by $ 90,000 
D) remain unchanged 
A) increase by $210,000 
B) increase by $120,000 
C) increase by $ 90,000 
D) remain unchanged

Question 16

Riley Company
Riley Company produces two products from a joint process: A and C.Joint processing costs for this production cycle are $9,000.
                     Yards        Sales price per yard at split-off      Disposal cost per yard at split-off        Further processing per yard          Final sale price per yard               A       1,800       $7.00       $4.50       $1.50       $ 8.00               C       2,600        10.00        6.00        3.50        12.25      
If A and C are processed further,no disposal costs will be incurred or such costs will be borne by the buyer.
Refer to Riley Company.Using sales value at split-off,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) $6,062 
A) $2,938 
B) $3,682 
C) $4,500 
D) $6,062

Question 17

Which of the following is/are synonyms for joint products?
$\text {\underline{ Main products} }$                                                     $\text {\underline{ Co- products } }$

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 18

Costs that are incurred in the manufacture of two or more products from a common process are referred to as ____________.

Accepted Answer

The answer of Costs that are incurred in the manufacture...

Question 19

Costs that are incurred after the split-off point in a production process are referred to as _________.

Accepted Answer

The answer of Costs that are incurred after the split-off...

Question 20

Shiny Floors Company
Shiny Floors 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. )
                   Barrels          Sales price per barrel at split-off      Disposal cost per barrel at split-off          Further processing costs       Final sales price per barrel              C         750       $10.00       $6.50       $2.00       $13.50               D       1,000        8.00       4.00       2.50       10.00               E       1,400        11.00       7.00       4.00       15.50               G       2,000      15.00        9.50       4.50       19.50      
If Shiny Floors 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 Shiny Floors 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

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

The net realizable value approach is normally used when the NRV is expected to be $\text {\underline{ insigificant} }$ $\text {\underline{ significant} }$

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?

When allocating joint process cost based on tons of output,all products will

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

Joint costs are most frequently allocated based upon relative

The method of pricing by-products/scrap where no value is assigned to these items until they are sold is known as the

Joint costs are allocated to joint products to

Relative sales value at split-off is used to allocate $\text {\underline{ cossts beyond split-off} }$ $\text {\underline{ joint costs} }$

Which of the following is/are synonyms for joint products? $\text {\underline{ Main products} }$ $\text {\underline{ Co- products } }$

Costs that are incurred in the manufacture of two or more products from a common process are referred to as ____________.

Costs that are incurred after the split-off point in a production process are referred to 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

	Yards	Sales price per yard at split-off	Disposal cost per yard at split-off	Further processing per yard	Final sale price per yard
X	1,500	$6.00	$3.50	$1.00	$ 7.50
Y	2,200	9.00	5.00	3.00	11.25

	Barrels	Sales price per barrel at split-off	Disposal cost per barrel at split-off	Further processing costs	Final sales price per barrel
C	750	$10.00	$6.50	$2.00	$13.50
D	1,000	8.00	4.00	2.50	10.00
E	1,400	11.00	7.00	4.00	15.50
G	2,000	15.00	9.50	4.50	19.50

Product	Sales Value at Split-off	Separable Processing Costs after Split-off	Sales Value at Completion
A	$12	$9	$21
B	10	4	17
C	15	6	19

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

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

The net realizable value approach is normally used when the NRV is expected to be insigificant‾ \text {\underline{ insigificant} } insigificant​ significant‾ \text {\underline{ significant} } significant​

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?

When allocating joint process cost based on tons of output,all products will

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

Joint costs are most frequently allocated based upon relative

The method of pricing by-products/scrap where no value is assigned to these items until they are sold is known as the

Joint costs are allocated to joint products to

Relative sales value at split-off is used to allocate cossts beyond split-off‾ \text {\underline{ cossts beyond split-off} } cossts beyond split-off​ joint costs‾ \text {\underline{ joint costs} } joint costs​

Which of the following is/are synonyms for joint products? Main products‾ \text {\underline{ Main products} } Main products​ Co- products ‾ \text {\underline{ Co- products } } Co- products ​

Costs that are incurred in the manufacture of two or more products from a common process are referred to as ____________.

Costs that are incurred after the split-off point in a production process are referred to 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

The net realizable value approach is normally used when the NRV is expected to be $\text {\underline{ insigificant} }$ $\text {\underline{ significant} }$

Relative sales value at split-off is used to allocate $\text {\underline{ cossts beyond split-off} }$ $\text {\underline{ joint costs} }$

Which of the following is/are synonyms for joint products? $\text {\underline{ Main products} }$ $\text {\underline{ Co- products } }$