Fulton Company Fulton Company is placing an ad in the local paper to advertise its products.The ad will run for one week at a total cost of $5,500.Fulton Company has four categories of products as follows: % of floor space Expected sales $\text {\underline{ occupied.} }$ $\text {\underline{ value} }$ $\begin{array}{lcl} \text { Harchware } & 20 \% & \$ 35,000 \\ \text { Hand Tools } & 15 & 15,000 \\ \text { Lawn Fumiture } & 45 & 64,500 \\ \text { Light Fixtures } & 20 & 25,500 \end{array}$ Refer to Fulton Company.What amount of advertising cost should be allocated to hardware,assuming Fulton allocates based on percent of floor space occupied?

A) $1,375 B) $1,100 C) $2,475 D) $ 825 A) $1,375 B) $1,100 C) $2,475 D) $ 825

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

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.Which products would be processed further?

(Multiple Choice)

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Question 101

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.Which products would be processed further?

(Multiple Choice)

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Question 102

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

(True/False)

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Question 103

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 R?

(Multiple Choice)

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Question 104

The net realizable value approach is used to account for scrap and by-products when the net realizable value is insignificant.

(True/False)

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Question 105

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.Assume that Industrial Solutions chooses to allocate its advertising cost among the three products.What amount of advertising cost is allocated to Product S using the floor space ratio?

(Multiple Choice)

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Question 106

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

(Multiple Choice)

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Question 107

Fulton Company Fulton Company is placing an ad in the local paper to advertise its products.The ad will run for one week at a total cost of $5,500.Fulton Company has four categories of products as follows: % of floor space Expected sales $\text {\underline{ occupied.} }$ $\text {\underline{ value} }$ Harchware 20\% \ 35,000 Hand Tools 15 15,000 Lawn Fumiture 45 64,500 Light Fixtures 20 25,500 Refer to Fulton Company.What amount of advertising cost should be allocated to hardware,assuming Fulton allocates based on percent of floor space occupied?

(Multiple Choice)

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Question 108

Witte Company produces three products from a joint process.The products can be sold at split-off or processed further.In deciding whether to sell at split-off or process further,management should

(Multiple Choice)

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Question 109

Each of the following is a method to allocate joint costs except

(Multiple Choice)

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Question 110

Lamar Company Lamar Company produces only two products and incurs joint processing costs that total $3,750.Products Alpha and Beta are produced in the following quantities during each month: 4,500 and 6,000 gallons,respectively.Lamar Company also runs one ad each month that advertises both products at a cost of $1,500.The selling price per gallon for the two products are $20 and $17.50,respectively. Refer to Lamar Company.What amount of advertising cost is allocated to each product based on sales value?

(Essay)

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Question 111

Joint costs occur before the split-off point in a production process.

(True/False)

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Question 112

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 A (round to the nearest dollar)?

(Multiple Choice)

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Question 113

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 A (round to the nearest dollar)?

(Multiple Choice)

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Question 114

Briefly discuss the net realizable value at split-off point method of allocating joint costs.

(Essay)

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Question 115

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 C (round to the nearest dollar)?

(Multiple Choice)

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Question 116

Joint costs may be allocated to main products,but not to by-products.

(True/False)

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Question 117

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 a physical measurement method,what amount of joint processing cost is allocated to Product G?

(Multiple Choice)

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Question 118

The net realizable value approach mandates that the NRV of the by-products/scrap be treated as

(Multiple Choice)

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Question 119

Waste created by a production process is

(Multiple Choice)

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Question 120

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

The net realizable value approach is used to account for scrap and by-products when the net realizable value is insignificant.

Witte Company produces three products from a joint process.The products can be sold at split-off or processed further.In deciding whether to sell at split-off or process further,management should

Each of the following is a method to allocate joint costs except

Joint costs occur before the split-off point in a production process.

Briefly discuss the net realizable value at split-off point method of allocating joint costs.

Joint costs may be allocated to main products,but not to by-products.

The net realizable value approach mandates that the NRV of the by-products/scrap be treated as

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

	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

	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

	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