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

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 3

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 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 4

Joint costs are allocated to which of the following products?
$\text {\underline{ By-products} }$                             $\text {\underline{Scrap} }$

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 5

Which of the following is a false statement about scrap and by-products?

Accepted Answer

A) Both by-products and scrap are salable. 
B) A by-product has a higher sales value than does scrap. 
C) Management's goal is to produce both scrap and by-products. 
D) Both scrap and by-products are incidental outputs to the joint process. 
A) Both by-products and scrap are salable. 
B) A by-product has a higher sales value than does scrap. 
C) Management's goal is to produce both scrap and by-products. 
D) Both scrap and by-products are incidental outputs to the joint process.

Question 6

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

Accepted Answer

A) $4,000 
B) $4,757 
C) $5,500 
D) $3,243 
A) $4,000 
B) $4,757 
C) $5,500 
D) $3,243

Question 7

Discuss briefly the three monetary measurement techniques of joint cost allocation.

Accepted Answer

The sales value at split-off method assi

Question 8

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 C?

Accepted Answer

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

Question 9

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 10

All costs that are incurred between the split-off point and the point of sale are known as

Accepted Answer

A) sunk costs. 
B) incremental separate costs. 
C) joint cost. 
D) committed costs. 
A) sunk costs. 
B) incremental separate costs. 
C) joint cost. 
D) committed costs.

Question 11

Which of the following statements is true regarding by-products or scrap?

Accepted Answer

A) Process costing is the only method that should result in by-products or scrap. 
B) Job order costing systems will never have by-products or scrap. 
C) Job order costing systems may have instances where by-products or scrap result from the production process. 
D) Process costing will never have by-products or scrap from the production process. 
A) Process costing is the only method that should result in by-products or scrap. 
B) Job order costing systems will never have by-products or scrap. 
C) Job order costing systems may have instances where by-products or scrap result from the production process. 
D) Process costing will never have by-products or scrap from the production process.

Question 12

Baker Company
Baker Company produces three products: A,B,and C from the same process.Joint costs for this production run are $2,100.
                     Pounds        Sales price per lb. at split-off      Disposal cost per lb. at split-off          Further processing per pound        Final sales price per pound               A        800       $6.50       $3.00       $2.00       $ 7.50               B       1,100        8.25        4.20        3.00       10.00               C       1,500        8.00        4.00        3.50       10.50      
If the products are processed further,Baker Company will incur the following disposal costs upon sale: A,$3.00;B,$2.00;and C,$1.00.
Refer to Baker Company.Using a physical measurement method,what amount of joint processing cost is allocated to Product B (round to the nearest dollar)?

Accepted Answer

A) $494 
B) $679 
C) $927 
D) $700 
A) $494 
B) $679 
C) $927 
D) $700

Question 13

Joint costs are useful for

Accepted Answer

A) setting the selling price of a product. 
B) determining whether to continue producing an item. 
C) evaluating management by means of a responsibility reporting system. 
D) determining inventory cost for accounting purposes. 
A) setting the selling price of a product. 
B) determining whether to continue producing an item. 
C) evaluating management by means of a responsibility reporting system. 
D) determining inventory cost for accounting purposes.

Question 14

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

Accepted Answer

A) $3,682 
B) $4,500 
C) $5,318 
D) $6,062 
A) $3,682 
B) $4,500 
C) $5,318 
D) $6,062

Question 15

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 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 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

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 18

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.To maximize profits,which products should Victoria process further?

Accepted Answer

A) Product A only 
B) Product B only 
C) Product C only 
D) Products A,B,and C 
A) Product A only 
B) Product B only 
C) Product C only 
D) Products A,B,and C

Question 19

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 Z (round to the nearest dollar)?

Accepted Answer

A) $2,796 
B) $4,910 
C) $4,000 
D) $2,390 
A) $2,796 
B) $4,910 
C) $4,000 
D) $2,390

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 D?

Accepted Answer

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

By-products are

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

Joint costs are allocated to which of the following products? $\text {\underline{ By-products} }$ $\text {\underline{Scrap} }$

Which of the following is a false statement about scrap and by-products?

Discuss briefly the three monetary measurement techniques of joint cost allocation.

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

All costs that are incurred between the split-off point and the point of sale are known as

Which of the following statements is true regarding by-products or scrap?

Joint costs are useful for

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

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

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
A	1,800	$7.00	$4.50	$1.50	$ 8.00
C	2,600	10.00	6.00	3.50	12.25

	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

	Pounds	Sales price per lb. at split-off	Disposal cost per lb. at split-off	Further processing per pound	Final sales price per pound
A	800	$6.50	$3.00	$2.00	$ 7.50
B	1,100	8.25	4.20	3.00	10.00
C	1,500	8.00	4.00	3.50	10.50

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

By-products are

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

Joint costs are allocated to which of the following products? By-products‾ \text {\underline{ By-products} } By-products​ Scrap‾ \text {\underline{Scrap} }Scrap​

Which of the following is a false statement about scrap and by-products?

Discuss briefly the three monetary measurement techniques of joint cost allocation.

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

All costs that are incurred between the split-off point and the point of sale are known as

Which of the following statements is true regarding by-products or scrap?

Joint costs are useful for

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

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

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

Joint costs are allocated to which of the following products? $\text {\underline{ By-products} }$ $\text {\underline{Scrap} }$