Question 1

Which of the following statements best define joint products?

Accepted Answer

A)  When one product has a high total sales value compared with the total sales value of other products of the process, that product is called a joint product. 
B)  Product of a joint production process that have the same sales value compared with the total sales value of the by products is called a joint product. 
C)  When one product has a low total sales value compared with the total sales value of other products of the process, that product is called a joint product. 
D)  When a joint production process yields two or more products with high total sales values relative to the total sales values of other products, those products are called joint products. 
A)  When one product has a high total sales value compared with the total sales value of other products of the process, that product is called a joint product. 
B)  Product of a joint production process that have the same sales value compared with the total sales value of the by products is called a joint product. 
C)  When one product has a low total sales value compared with the total sales value of other products of the process, that product is called a joint product. 
D)  When a joint production process yields two or more products with high total sales values relative to the total sales values of other products, those products are called joint products.

Question 2

What factor most often drives joint cost allocation?

Accepted Answer

A)  performance evaluation 
B)  manager compensation 
C)  selling prices 
D)  simplicity of the method 
A)  performance evaluation 
B)  manager compensation 
C)  selling prices 
D)  simplicity of the method

Question 3

Answer the following questions using the information below:
The Green Company processes unprocessed goat milk up to the splitoff point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October:
 $\text { Direct Materials processed: } \quad 98,000 \text { gallons (after shrinkage) }$
$\begin{array}{lll}
\text { Proauction: } & \text { Condensed goat milk } & 42,500 \text { gallons } \
& \text { Skim goat milk } & 55,500 \text { gallons } \
\text { Sales: } & \text { Condensed goat milk } & \$ 3.50 \text { per gallon } \
&\text { skim goat milk } & \$ 2.50 \text { per gallon }
\end{array}$ The costs of purchasing the of unprocessed goat milk and processing it up to the splitoff point to yield a total of 98,000 gallons of saleable product was $184,480. There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 42,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $4 per usable gallon. Xyla can be sold for $20 per gallon.
Skim goat milk can be processed further to yield 54,200 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $4. The product can be sold for $9 per gallon.
There are no beginning and ending inventory balances.
-What is the estimated net realizable value of the skim goat ice cream at the splitoff point?

Accepted Answer

A)  $271,000 
B)  $287,400 
C)  $672,000 
D)  $712,600 
A)  $271,000 
B)  $287,400 
C)  $672,000 
D)  $712,600

Question 4

Classification of main products,joint products,and byproducts can always be done with ease.

Accepted Answer

A) True 
 B)False

Question 5

New York Liberty Corporation makes miniature statues of the Empire State Building from cast iron.Sales total 50,000 units a year.The statues are finished either rough or polished,with an average demand of 60% rough and 40% polished.Iron ingots,the direct material,costs $6 per pound.Processing costs are $300 to convert 30 pounds into 60 statues.Rough statues are sold for $15 each,and polished statues can be sold for $18 or engraved for an additional cost of $5.Polished statues can then be sold for $30.
Required:
Determine whether New York Liberty Company should sell the engraved statutes.Why?

Accepted Answer

New York Liberty sho

Question 6

Discuss in brief how easy it is for companies to classify products as main products,joint products,and byproducts.

Accepted Answer

Distinctions among main products,joint p

Question 7

In joint costing,the sales value at splitoff method is used frequently ________.

Accepted Answer

A)  in a dynamic business environment where the selling prices change frequently 
B)  in anticipation of subsequent management decisions 
C)  when selling prices are dependent on further processing decisions 
D)  since the selling-price data exists at the splitoff 
A)  in a dynamic business environment where the selling prices change frequently 
B)  in anticipation of subsequent management decisions 
C)  when selling prices are dependent on further processing decisions 
D)  since the selling-price data exists at the splitoff

Question 8

In joint costing,which of the following is a market-based approach to allocating costs?

Accepted Answer

A)  sales units 
B)  units of production 
C)  physical measures 
D)  net realizable value 
A)  sales units 
B)  units of production 
C)  physical measures 
D)  net realizable value

Question 9

Answer the following questions using the information below:
The Alfarm Corporation processes raw milk up to the splitoff point where two products, cream and liquid skim, are produced and sold. There was no beginning inventory. The following material was collected for the month of February:
 $\begin{array}{lll}
\text { Direct materials processed: } && 750,000 \text { gallons }(727,500 \text { gallons of good product) } \
\text { Production: } & \text { Cream } & 442,500 \text { gallons } \
& \text { Liquid skim } & 285,000 \text { gallons } \
\text { Sales: } & \text { Cream } & 421,500 \text { at } \$ 110 \text { per gallon } \
& \text { Liquid skm } & 273,000 \text { at } \$ 100 \text { per gallon }
\end{array}$ The cost of purchasing 750,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 727,500 gallons of good product was $2,280,000.
-When using a physical-volume measure,what is the approximate amount of joint costs that will be allocated to cream and liquid skim?

Accepted Answer

A)  $1,386,804 and $893,196 
B)  $1,140,000 and $1,140,000 
C)  $1,368,000 and $912,000 
D)  $1,254,00 and $1,026,000 
A)  $1,386,804 and $893,196 
B)  $1,140,000 and $1,140,000 
C)  $1,368,000 and $912,000 
D)  $1,254,00 and $1,026,000

Question 10

Which of the following statements is true of the production method of accounting for byproducts?

Accepted Answer

A)  It makes no journal entries until the byproduct is sold. 
B)  It is the preferred method because of the matching principle. 
C)  It records revenues of the byproduct in the income statement as revenue. 
D)  It adds revenues of the byproduct to the cost of goods sold in the income statement. 
A)  It makes no journal entries until the byproduct is sold. 
B)  It is the preferred method because of the matching principle. 
C)  It records revenues of the byproduct in the income statement as revenue. 
D)  It adds revenues of the byproduct to the cost of goods sold in the income statement.

Question 11

What are the two methods to account for byproducts.Which is the more appropriate method to use and why?

Accepted Answer

The two methods are the production metho

Which of the following statements best define joint products?

What factor most often drives joint cost allocation?

Classification of main products,joint products,and byproducts can always be done with ease.

Discuss in brief how easy it is for companies to classify products as main products,joint products,and byproducts.

In joint costing,the sales value at splitoff method is used frequently ________.

In joint costing,which of the following is a market-based approach to allocating costs?

Which of the following statements is true of the production method of accounting for byproducts?

What are the two methods to account for byproducts.Which is the more appropriate method to use and why?

The Manager and Management Accounting

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

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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 best define joint products?

What factor most often drives joint cost allocation?

Classification of main products,joint products,and byproducts can always be done with ease.

Discuss in brief how easy it is for companies to classify products as main products,joint products,and byproducts.

In joint costing,the sales value at splitoff method is used frequently ________.

In joint costing,which of the following is a market-based approach to allocating costs?

Which of the following statements is true of the production method of accounting for byproducts?

What are the two methods to account for byproducts.Which is the more appropriate method to use and why?

The Manager and Management Accounting

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

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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