Question 1

What is the name of a cost of production process that yields multiple products simultaneously?

Accepted Answer

A) byproduct 
B) joint 
C) main 
D) separable 
A) byproduct 
B) joint 
C) main 
D) separable

Question 2

The Brital Company processes unprocessed milk to produce two products,Butter Cream and Condensed Milk.The following information was collected for the month of June:

The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 28,000 gallons of saleable product was $113,100.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.If separable costs of Butter Cream was $17,500 and constant gross margin was 20%,what would have been the allocated joint costs of Condensed Milk?

Accepted Answer

A) $20,900 
B) $34,900 
C) $92,200 
D) $87,200 
A) $20,900 
B) $34,900 
C) $92,200 
D) $87,200

Question 3

The Green Company processes unprocessed goat milk up to the split-off point where two products,condensed goat milk and skim goat milk result.The following information was collected for the month of October:
 
The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 102,500 gallons of saleable product was $189,480.There were no inventory balances of either product.Condensed goat milk may be processed further to yield 44,500 gallons (the remainder is shrinkage)of a medicinal milk product,Xyla,for an additional processing cost of $6 per usable gallon.Xyla can be sold for $22 per gallon.
Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice cream,for an additional processing cost per usable gallon of $6.The product can be sold for $14 per gallon.
There are no beginning and ending inventory balances.
How much (if any)extra income would Green earn if it produced and sold all of the Xyla from the condensed goat milk? Allocate joint processing costs based upon relative sales value on the split-off.(Extra income means income in excess of what Green would have earned from selling condensed goat milk. )(Round intermediary percentages to the nearest hundredth. )

Accepted Answer

A) $621,566 
B) $277,100 
C) $554,500 
D) $350,554 
A) $621,566 
B) $277,100 
C) $554,500 
D) $350,554

Question 4

Which of the following statements is true of the methods for allocating joint costs?

Accepted Answer

A) Constant gross-margin percentage method results in same joint production cost per unit for all products. 
B) Estimated net realizable value method results in same gross margin percentage for all products. 
C) Present value allocation method is the least preferred method due to its complex calculations. 
D) Sales value at split-off method uses the sales value of the entire production of the accounting period to allocate costs. 
A) Constant gross-margin percentage method results in same joint production cost per unit for all products. 
B) Estimated net realizable value method results in same gross margin percentage for all products. 
C) Present value allocation method is the least preferred method due to its complex calculations. 
D) Sales value at split-off method uses the sales value of the entire production of the accounting period to allocate costs.

Question 5

A company produces three products from a joint production process:: A,B,and C.As a percentage of total sales value,a represents 50%,B 49.5%,and C .5%.Product C could be considered a ________.

Accepted Answer

A) primary product 
B) main product 
C) byproduct 
D) waste product 
A) primary product 
B) main product 
C) byproduct 
D) waste product

Question 6

The Berkel Corporation manufactures Widgets,Gizmos,and Turnbols from a joint process.June production is 7000 widgets;10,500 gizmos;and 12,500 turnbols.Respective per unit selling prices at split-off are $80,$55,and $30.Joint costs up to the split-off point are $188,500.If joint costs are allocated based upon the sales value at split-off,what amount of joint costs will be allocated to the widgets? (Do not round any intermediary calculations. )

Accepted Answer

A) $23,492 
B) $69,792 
C) $46,736 
D) $71,973 
A) $23,492 
B) $69,792 
C) $46,736 
D) $71,973

Question 7

Torid Company processes 18,700 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $10 per gallon and Product Y,the main product,sells for $150 per gallon.The following information is for December:
 
The manufacturing costs totalled $30,000.
How much is the ending inventory for the byproduct if byproducts are recognized in the general ledger at the point of sale?

Accepted Answer

A) $0 
B) $1750 
C) $3000 
D) $26,250 
A) $0 
B) $1750 
C) $3000 
D) $26,250

Question 8

In joint costing,the constant gross-margin percentage method recognizes that the profit margin is not just attributable to the joint process but is also derived from the costs incurred after split-off.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) It makes journal entries when the byproducts are produced. 
B) It is the preferred method because of the matching principle. 
C) It allows a firm to manage its reported earnings by timing the sale of byproducts. 
D) This method recognizes the byproduct inventory in the accounting period in which it is produced. 
A) It makes journal entries when the byproducts are produced. 
B) It is the preferred method because of the matching principle. 
C) It allows a firm to manage its reported earnings by timing the sale of byproducts. 
D) This method recognizes the byproduct inventory in the accounting period in which it is produced.

Question 10

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

Question 11

Which of the following is true of the physical-measure approach of allocating joint costs?

Accepted Answer

A) Costs cannot be allocated if the measurement basis for each product are different. 
B) Physical measures usually result in less costs being allocated to the product that weighs the most. 
C) The physical measure reflects a product's ability to generate revenues. 
D) Obtaining comparable physical measures for all products is always straightforward. 
A) Costs cannot be allocated if the measurement basis for each product are different. 
B) Physical measures usually result in less costs being allocated to the product that weighs the most. 
C) The physical measure reflects a product's ability to generate revenues. 
D) Obtaining comparable physical measures for all products is always straightforward.

Question 12

The Berkel Corporation manufactures Widgets,Gizmos,and Turnbols from a joint process.June production is 10,000 widgets;13,500 gizmos;and 15,000 turnbols.Respective per unit selling prices at split-off are $95,$60,and $20.Joint costs up to the split-off point are $187,500.What amount of joint costs will be allocated to the Turnbols? (Do not round any intermediary calculations. )

Accepted Answer

A) $27,306 
B) $17,066 
C) $73,726 
D) $86,468 
A) $27,306 
B) $17,066 
C) $73,726 
D) $86,468

Question 13

Which of the following statements is true of joint costing?

Accepted Answer

A) The costs of a production process that yields multiple products simultaneously are called joint costs. 
B) Distribution costs incurred beyond the split-off point that are assignable to each of the specific products identified at the split-off point are considered as joint costs. 
C) The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold. 
D) Joint costing is less useful for companies which manufacture multiple products simultaneously from the same production process. 
A) The costs of a production process that yields multiple products simultaneously are called joint costs. 
B) Distribution costs incurred beyond the split-off point that are assignable to each of the specific products identified at the split-off point are considered as joint costs. 
C) The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold. 
D) Joint costing is less useful for companies which manufacture multiple products simultaneously from the same production process.

Question 14

Torid Company processes 17,750 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $7 per gallon and Product Y,the main product,sells for $160 per gallon.The following information is for December:
 
The manufacturing costs totalled $27,000.
The production method will report Product X in the balance sheet at ________.

Accepted Answer

A) $0 
B) $4800 
C) $875 
D) $20,000 
A) $0 
B) $4800 
C) $875 
D) $20,000

Question 15

Separable costs that do not differ between alternatives are irrelevant for decision making.

Accepted Answer

A) True 
 B)False

Question 16

Pilgrim Corporation processes frozen turkeys.The company has not been pleased with its profit margin per product because it appears that the high value items have too few costs assigned to them,while the low value items have too many costs assigned to them.The processing results in several products,the primary one of which is frozen small turkeys.Other products include frozen parts such as wings and legs,byproducts such as skin and bones,and unused scrap items.
Required:
What may be the cost assignment problem if a key consideration is the value of the products being sold?

Accepted Answer

First,the company needs to consider whet

Question 17

Netzone Company is in semiconductor industry and fabrication of silicon-wafer chips splits off two types of memory chips,Standard and Premium.The following information was collected for last quarter of the calendar year:
 
The cost of purchasing 300 kgs of direct materials and processing it up to the split-off point to yield a total of 18,800 chips of good products was $2,030,000.Beginning inventories totalled 150 chips for Standard and 80 chips for Premium.Ending inventory amounts reflected 150 chips of Standard and 80 chips of Premium.October costs per unit were the same as November.When using a physical-volume measure,what is the approximate amount of joint costs that will be allocated Premium chips? (Round intermediary percentages to the nearest hundredth. )

Accepted Answer

A) $734,251 
B) $714,469 
C) $1,015,000 
D) $669,106 
A) $734,251 
B) $714,469 
C) $1,015,000 
D) $669,106

Question 18

The constant gross-margin percentage NRV method makes the simplifying assumption of treating the joint products as though they comprise a single product.

Accepted Answer

A) True 
 B)False

Question 19

The Berkel Corporation manufactures Widgets,Gizmos,and Turnbols from a joint process.June production is 9000 widgets;12,500 gizmos;and 14,500 turnbols.Respective per unit selling prices at split-off are $75,$50,and $25.Joint costs up to the split-off point are $188,000.What amount of joint costs will be allocated to the Gizmos? (Do not round any intermediary calculations. )

Accepted Answer

A) $40,992 
B) $21,260 
C) $70,677 
D) $76,331 
A) $40,992 
B) $21,260 
C) $70,677 
D) $76,331

Question 20

The Kenton Company processes unprocessed milk to produce two products,Butter Cream and Condensed Milk.The following information was collected for the month of June:
Direct Materials processed: 24,500 gallons (after shrinkage)
 
The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 24,500 gallons of saleable product was $55,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.What is the constant gross-margin percent for Kenton?

Accepted Answer

A) 64.1% 
B) 20.4% 
C) 23.6% 
D) 62.6% 
A) 64.1% 
B) 20.4% 
C) 23.6% 
D) 62.6%

What is the name of a cost of production process that yields multiple products simultaneously?

Which of the following statements is true of the methods for allocating joint costs?

A company produces three products from a joint production process:: A,B,and C.As a percentage of total sales value,a represents 50%,B 49.5%,and C .5%.Product C could be considered a ________.

In joint costing,the constant gross-margin percentage method recognizes that the profit margin is not just attributable to the joint process but is also derived from the costs incurred after split-off.

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

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

Which of the following is true of the physical-measure approach of allocating joint costs?

Which of the following statements is true of joint costing?

Separable costs that do not differ between alternatives are irrelevant for decision making.

The constant gross-margin percentage NRV method makes the simplifying assumption of treating the joint products as though they comprise a single product.

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

What is the name of a cost of production process that yields multiple products simultaneously?

Which of the following statements is true of the methods for allocating joint costs?

A company produces three products from a joint production process:: A,B,and C.As a percentage of total sales value,a represents 50%,B 49.5%,and C .5%.Product C could be considered a ________.

In joint costing,the constant gross-margin percentage method recognizes that the profit margin is not just attributable to the joint process but is also derived from the costs incurred after split-off.

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

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

Which of the following is true of the physical-measure approach of allocating joint costs?

Which of the following statements is true of joint costing?

Separable costs that do not differ between alternatives are irrelevant for decision making.

The constant gross-margin percentage NRV method makes the simplifying assumption of treating the joint products as though they comprise a single product.

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