Question 1

The constant gross-margin percentage NRV method of joint cost allocation:

Accepted Answer

A) involves allocating costs in such a way that maintaining the same gross margin percentage for each product that was obtained in prior years 
B) involves allocating costs in such a way that the overall gross margin percentage is identical for the individual products 
C) is the same as the estimated NRV method 
D) is the same as the sales-value at splitoff method 
A) involves allocating costs in such a way that maintaining the same gross margin percentage for each product that was obtained in prior years 
B) involves allocating costs in such a way that the overall gross margin percentage is identical for the individual products 
C) is the same as the estimated NRV method 
D) is the same as the sales-value at splitoff method

Question 2

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 a physical-volume measure, what is the approximate amount of joint costs that will be allocated to Mr. DirtOut and Mr. SinkClean?

Accepted Answer

A) $464,232 and $297,768 
B) $448,400 and $311,600 
C) $454,404 and $305,596 
D) $461,252 and $298,748 
A) $464,232 and $297,768 
B) $448,400 and $311,600 
C) $454,404 and $305,596 
D) $461,252 and $298,748

Question 3

A criticism of the practice of carrying inventories at estimated net realizable values is that this practice recognizes income before sales are made.

Accepted Answer

A) True 
 B)False

Question 4

The sales value at splitoff method enables the accountant to obtain individual product costs and gross margins.

Accepted Answer

A) True 
 B)False

Question 5

Paragon University operates an extensive and an expensive registration, testing, and counseling center, through which all students are required to pass through when they enter the university. The registration effort's costs (for the most part)are almost impossible to allocate based upon which students require time, effort, etc. The cost of this center is approximately 15% of the total costs of Paragon. This department engages in no other activities than the registration of students. Paragon is interested in determining the profitability of the three technical departments it operates. Paragon has the perception that some departments are more profitable than others, and it would like to determine an appropriate method of allocating the costs of this registration center.
Required:
Recommend to Paragon University a method (or methods)of allocating the costs of registration to the three departments.

Accepted Answer

The joint costs of the registration effo

The constant gross-margin percentage NRV method of joint cost allocation:

A criticism of the practice of carrying inventories at estimated net realizable values is that this practice recognizes income before sales are made.

The sales value at splitoff method enables the accountant to obtain individual product costs and gross margins.

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

The constant gross-margin percentage NRV method of joint cost allocation:

A criticism of the practice of carrying inventories at estimated net realizable values is that this practice recognizes income before sales are made.

The sales value at splitoff method enables the accountant to obtain individual product costs and gross margins.

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