Question 1

Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products?

Accepted Answer

A) A high individual product value results in a high level of joint costs. 
B) A low individual product value results in a low level of joint costs. 
C) A high individual product value results in a low level of joint costs. 
D) There is no cause-and-effect relationship. 
A) A high individual product value results in a high level of joint costs. 
B) A low individual product value results in a low level of joint costs. 
C) A high individual product value results in a low level of joint costs. 
D) There is no cause-and-effect relationship. D

Question 2

The focus of joint costing is assigning costs to individual products as assembly occurs.

Accepted Answer

A) True 
 B)False  False

Question 3

Zenon Chemical, Inc., processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows:
   Required:
Determine the amount of joint cost allocated to each product if the physical-measure method is used.

Accepted Answer

The answer of Zenon Chemical, Inc., processes pine rosin into...

Question 4

All of the following changes may indicate a change in product classification of a manufacturing process which has a splitoff point EXCEPT a:

Accepted Answer

A) byproduct increases in sales value due to a new application 
B) main product becomes a joint product 
C) main product becomes technologically obsolete 
D) byproduct loses its market due to a new invention 
A) byproduct increases in sales value due to a new application 
B) main product becomes a joint product 
C) main product becomes technologically obsolete 
D) byproduct loses its market due to a new invention

Question 5

Beverage Drink Company processes direct materials up to the splitoff point where two products, A and B, are obtained. The following information was collected for the month of July:       The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters of good products was $4,500. There were no inventory balances of A and B.
Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.
If Product Z5 and Product W3 are produced, what are the expected sales values of production, respectively?

Accepted Answer

A) $11,250 and $34,375 
B) $22,500 and $ 5,000 
C) $31,250 and $10,500 
D) $34,375 and $11,250 
A) $11,250 and $34,375 
B) $22,500 and $ 5,000 
C) $31,250 and $10,500 
D) $34,375 and $11,250

Question 6

Answer the following questions using the information below:
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
       The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?

Accepted Answer

A) 59.00% and 41.00% 
B) 60.82% and 39.18% 
C) 39.18% and 60.82% 
D) 59.79% and 40.21% 
A) 59.00% and 41.00% 
B) 60.82% and 39.18% 
C) 39.18% and 60.82% 
D) 59.79% and 40.21%

Question 7

Calamata Corporation processes a single material into three separate products A, B, and C. During September, the joint costs of processing were $300,000. Production and sales value information for the month were as follows:
   Required:
Determine the amount of joint cost allocated to each product if the constant gross-margin percentage NRV method is used.

Accepted Answer

The gross margin per

Question 8

An example of a market-based approach to allocating joint costs is (are)allocating joint costs based on:

Accepted Answer

A) sales value at splitoff method 
B) physical volume 
C) constant gross-margin percentage method 
D) Both A and C are correct. 
A) sales value at splitoff method 
B) physical volume 
C) constant gross-margin percentage method 
D) Both A and C are correct.

Question 9

Separable costs are incurred beyond the splitoff point that are assignable to each of the specific products identified at the splitoff point.

Accepted Answer

A) True 
 B)False

Question 10

Answer the following questions using the information below:
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
       The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-When using the physical-volume method, what is Mr. DirtOut's approximate production cost per unit?

Accepted Answer

A) $3.02 
B) $3.08 
C) $3.14 
D) $3.22 
A) $3.02 
B) $3.08 
C) $3.14 
D) $3.22

Question 11

The net realizable value method:

Accepted Answer

A) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point 
B) allocates joint costs to joint products on the basis of the relative sales value at the splitoff point 
C) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage 
D) allocates joint costs to joint products on the basis of relative NRV 
A) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point 
B) allocates joint costs to joint products on the basis of the relative sales value at the splitoff point 
C) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage 
D) allocates joint costs to joint products on the basis of relative NRV

Question 12

The constant gross-margin percentage NRV method allocates joint costs to joint products in such a way that the gross margin on each joint product is the same as it was in the previous year.

Accepted Answer

A) True 
 B)False

Question 13

The sales value at splitoff method is an example of allocating costs using physical measures.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a reason to allocate joint costs?

Accepted Answer

A) rate regulation requirements, if applicable 
B) cost of goods sold computations 
C) insurance settlement cost information requirements 
D) All of these answers are correct. 
A) rate regulation requirements, if applicable 
B) cost of goods sold computations 
C) insurance settlement cost information requirements 
D) All of these answers are correct.

Question 15

When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the:

Accepted Answer

A) total amount of the joint costs 
B) portion of the joint costs allocated to the individual products 
C) extra revenue earned past the splitoff point 
D) extra operating income earned past the splitoff point 
A) total amount of the joint costs 
B) portion of the joint costs allocated to the individual products 
C) extra revenue earned past the splitoff point 
D) extra operating income earned past the splitoff point

Question 16

The production method for recognizing byproducts is conceptually correct in that it is consistent with the matching principle.

Accepted Answer

A) True 
 B)False

Question 17

Industries that recognize income on each product when production is completed include:

Accepted Answer

A) mining 
B) toy manufacturers 
C) canning 
D) Both A and C are correct. 
A) mining 
B) toy manufacturers 
C) canning 
D) Both A and C are correct.

Question 18

Joint processing costs are always relevant for pricing decisions of the final product.

Accepted Answer

A) True 
 B)False

Question 19

An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task.

Accepted Answer

A) True 
 B)False

Question 20

The sales value at splitoff method:

Accepted Answer

A) allocates joint costs to joint products on the basis of the relative total sales value at the splitoff point 
B) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point 
C) allocates joint costs to joint products on the basis of relative NRV 
D) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage 
A) allocates joint costs to joint products on the basis of the relative total sales value at the splitoff point 
B) allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point 
C) allocates joint costs to joint products on the basis of relative NRV 
D) allocates joint costs to joint products in a way that each product has an identical gross-margin percentage

Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products?

The focus of joint costing is assigning costs to individual products as assembly occurs.

All of the following changes may indicate a change in product classification of a manufacturing process which has a splitoff point EXCEPT a:

An example of a market-based approach to allocating joint costs is (are)allocating joint costs based on:

Separable costs are incurred beyond the splitoff point that are assignable to each of the specific products identified at the splitoff point.

The net realizable value method:

The constant gross-margin percentage NRV method allocates joint costs to joint products in such a way that the gross margin on each joint product is the same as it was in the previous year.

The sales value at splitoff method is an example of allocating costs using physical measures.

Which of the following is a reason to allocate joint costs?

When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the:

The production method for recognizing byproducts is conceptually correct in that it is consistent with the matching principle.

Industries that recognize income on each product when production is completed include:

Joint processing costs are always relevant for pricing decisions of the final product.

An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task.

The sales value at splitoff method:

The Accountants Role in the Organization

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

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

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, Time, and the Theory of Constraints

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

Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products?

The focus of joint costing is assigning costs to individual products as assembly occurs.

All of the following changes may indicate a change in product classification of a manufacturing process which has a splitoff point EXCEPT a:

An example of a market-based approach to allocating joint costs is (are)allocating joint costs based on:

Separable costs are incurred beyond the splitoff point that are assignable to each of the specific products identified at the splitoff point.

The net realizable value method:

The constant gross-margin percentage NRV method allocates joint costs to joint products in such a way that the gross margin on each joint product is the same as it was in the previous year.

The sales value at splitoff method is an example of allocating costs using physical measures.

Which of the following is a reason to allocate joint costs?

When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the:

The production method for recognizing byproducts is conceptually correct in that it is consistent with the matching principle.

Industries that recognize income on each product when production is completed include:

Joint processing costs are always relevant for pricing decisions of the final product.

An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task.

The sales value at splitoff method:

The Accountants Role in the Organization

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

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

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, Time, and the Theory of Constraints

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