Question 1

Which of the following statements best define split off point in joint costing?

Accepted Answer

A) It is the point at which managers decide to discontinue one or more of the products. 
B) It is the point at which the managers decide to outsource some of its production processes. 
C) It is the juncture in a joint production process when two or more products become separately identifiable. 
D) It is the juncture at which decisions determining joint costs of various products to be produced are taken. 
A) It is the point at which managers decide to discontinue one or more of the products. 
B) It is the point at which the managers decide to outsource some of its production processes. 
C) It is the juncture in a joint production process when two or more products become separately identifiable. 
D) It is the juncture at which decisions determining joint costs of various products to be produced are taken.

Question 2

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 105,000 gallons of saleable product was $191,480.There were no inventory balances of either product.Condensed goat milk may be processed further to yield 45,000 gallons (the remainder is shrinkage)of a medicinal milk product,Xyla,for an additional processing cost of $5 per usable gallon.Xyla can be sold for $20 per gallon.
Skim goat milk can be processed further to yield 58,200 gallons of skim goat ice cream,for an additional processing cost per usable gallon of $5.The product can be sold for $12 per gallon.
There are no beginning and ending inventory balances.
Using the sales value at split-off method,what is the gross-margin percentage for skim goat milk at the split-off point? (Round intermediary percentages to the nearest hundredth. )

Accepted Answer

A) 46.25% 
B) 50.00% 
C) 56.75% 
D) 53.75% 
A) 46.25% 
B) 50.00% 
C) 56.75% 
D) 53.75%

Question 3

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 4

Which of the following statements is true of main products and byproducts?

Accepted Answer

A) A byproduct will never become a main product. 
B) A main product will never become a byproduct. 
C) Product classifications may change over time. 
D) Product classifications remains constant over time. 
A) A byproduct will never become a main product. 
B) A main product will never become a byproduct. 
C) Product classifications may change over time. 
D) Product classifications remains constant over time.

Question 5

All products yielded from joint product processing have some positive value to the firm.

Accepted Answer

A) True 
 B)False

Question 6

Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings)emerge from the process.The products are then sold to an independent company that markets and distributes them to retail outlets.The following information was collected for the month of October:
 
The cost of purchasing 270 trees and processing them up to the split-off point to yield 150,000 sheets of paper and 150,000 pencil casings is $14,500.
Bismite's accounting department reported no beginning inventory.
What is the total sales value at the split-off point of the pencil casings?

Accepted Answer

A) $15,000 
B) $21,000 
C) $20,860 
D) $13,700 
A) $15,000 
B) $21,000 
C) $20,860 
D) $13,700

Question 7

Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings)are obtained.The products are then sold to an independent company that markets and distributes them to retail outlets.The following information was collected for the month of October:
 
The cost of purchasing 310 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500.
Bismite's accounting department reported no beginning inventory.
What is the total sales value at the split-off point for paper?

Accepted Answer

A) $42,600 
B) $34,000 
C) $36,000 
D) $43,200 
A) $42,600 
B) $34,000 
C) $36,000 
D) $43,200

Question 8

When a joint production process yields one product with a high total sales value compared to the total sales value of the other products of the process,that product is called a joint product.

Accepted Answer

A) True 
 B)False

Question 9

List the reasons that the sales value at split-off method of joint cost allocation should be used.

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00 2.No anticipation o

Question 10

Joint costing allocates the joint costs to the individual products that are eventually sold.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true of joint production process and its components?

Accepted Answer

A) Distribution costs incurred beyond the split-off point assignable to each of the specific products identified at the split-off point are considered as joint costs. 
B) Decisions relating to the sale or further processing of each identifiable product can be made independently of decisions about the other products beyond the split-off point. 
C) When a joint production process yields two or more products with low total sales values relative to the total sales values of other products,those products are called joint products. 
D) The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold. 
A) Distribution costs incurred beyond the split-off point assignable to each of the specific products identified at the split-off point are considered as joint costs. 
B) Decisions relating to the sale or further processing of each identifiable product can be made independently of decisions about the other products beyond the split-off point. 
C) When a joint production process yields two or more products with low total sales values relative to the total sales values of other products,those products are called joint products. 
D) The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold.

Question 12

Separable costs include manufacturing costs only.

Accepted Answer

A) True 
 B)False

Question 13

Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings)emerge.The products are then sold to an independent company that markets and distributes them to retail outlets.The following information was collected for the month of October:
 
The cost of purchasing 350 trees and processing them up to the split-off point to yield 150,000 sheets of paper and 150,000 pencil casings is $15,500.
Bismite's accounting department reported no beginning inventory.
If the sales value at split-off method is used,what is the approximate production cost for each paper sheet? (Round intermediary percentages to the nearest hundredth. )

Accepted Answer

A) $0.043 
B) $0.065 
C) $0.041 
D) $0.062 
A) $0.043 
B) $0.065 
C) $0.041 
D) $0.062

Question 14

What revenue or expense amounts are necessary to make a sell-or-process-further decision and why? What items are irrelevant to the decision and why?

Accepted Answer

The revenues and expenses that occur aft

Question 15

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 16

In joint costing,which of the following changes may lead to a change in product classification?

Accepted Answer

A) main product sales price increases due to a new application 
B) byproduct sales price decreases due to a new government regulation 
C) main product becomes technologically obsolete and it's market value falls significantly 
D) byproduct losses value due to a competing products 
A) main product sales price increases due to a new application 
B) byproduct sales price decreases due to a new government regulation 
C) main product becomes technologically obsolete and it's market value falls significantly 
D) byproduct losses value due to a competing products

Question 17

Which of the following is a is a market-based approach to allocating joint 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 18

The constant gross-margin percentage NRV method is the only method whereby products can receive negative allocations.

Accepted Answer

A) True 
 B)False

Question 19

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 103,000 gallons of saleable product was $186,480.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 $7 per usable gallon.Xyla can be sold for $25 per gallon.
Skim goat milk can be processed further to yield 56,700 gallons of skim goat ice cream,for an additional processing cost per usable gallon of $7.The product can be sold for $12 per gallon.
There are no beginning and ending inventory balances.
How much (if any)extra income would Green earn if it produced and sold skim milk ice cream from goats rather than goat skim milk? Allocate joint processing costs based upon the relative sales value at the split-off point.(Round intermediary percentages to the nearest hundredth. )

Accepted Answer

A) $138,500 
B) $711,090 
C) $666,000 
D) $186,930 
A) $138,500 
B) $711,090 
C) $666,000 
D) $186,930

Question 20

Torid Company processes 18,025 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $5 per gallon and Product Y,the main product,sells for $170 per gallon.The following information is for December:
 
The manufacturing costs totalled $26,000.
Under production method,Product X NRV would be offset against the costs of Product Y by how much?

Accepted Answer

A) $28,500 
B) $29,000 
C) $17,000 
D) $500 
A) $28,500 
B) $29,000 
C) $17,000 
D) $500

Which of the following statements best define split off point in joint costing?

Which of the following statements is true of main products and byproducts?

All products yielded from joint product processing have some positive value to the firm.

When a joint production process yields one product with a high total sales value compared to the total sales value of the other products of the process,that product is called a joint product.

List the reasons that the sales value at split-off method of joint cost allocation should be used.

Joint costing allocates the joint costs to the individual products that are eventually sold.

Which of the following statements is true of joint production process and its components?

Separable costs include manufacturing costs only.

What revenue or expense amounts are necessary to make a sell-or-process-further decision and why? What items are irrelevant to the decision and why?

Which of the following statements best define joint products?

In joint costing,which of the following changes may lead to a change in product classification?

Which of the following is a is a market-based approach to allocating joint costs?

The constant gross-margin percentage NRV method is the only method whereby products can receive negative allocations.

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 split off point in joint costing?

Which of the following statements is true of main products and byproducts?

All products yielded from joint product processing have some positive value to the firm.

When a joint production process yields one product with a high total sales value compared to the total sales value of the other products of the process,that product is called a joint product.

List the reasons that the sales value at split-off method of joint cost allocation should be used.

Joint costing allocates the joint costs to the individual products that are eventually sold.

Which of the following statements is true of joint production process and its components?

Separable costs include manufacturing costs only.

What revenue or expense amounts are necessary to make a sell-or-process-further decision and why? What items are irrelevant to the decision and why?

Which of the following statements best define joint products?

In joint costing,which of the following changes may lead to a change in product classification?

Which of the following is a is a market-based approach to allocating joint costs?

The constant gross-margin percentage NRV method is the only method whereby products can receive negative allocations.

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