Question 1

When the selling prices of all products at the split-off point are unavailable,the ________ is the best alternative for allocating joint costs.

Accepted Answer

A) sales value at split-off method 
B) NRV method 
C) physical measures method 
D) constant gross-margin percentage method 
A) sales value at split-off method 
B) NRV method 
C) physical measures method 
D) constant gross-margin percentage method

Question 2

Which of the following journal entries can happen only under the production method of recording byproducts?

Accepted Answer

A) Work in Process Finished Goods - Byproduct
  
B) Cash or Accounts Receivable   
C) Byproduct Inventory Finished Goods - Main product
  
D) Cash or Accounts Receivable   
A) Work in Process Finished Goods - Byproduct
  
B) Cash or Accounts Receivable   
C) Byproduct Inventory Finished Goods - Main product
  
D) Cash or Accounts Receivable

Question 3

Which of the following is false regarding net realizable value (NRV)?

Accepted Answer

A) it is better to use a product's market value at the split-off point than its estimated NRV 
B) the estimated NRV at the split-off point is calculated by taking the sales value after further processing and deducting additional processing costs 
C) NRV is the estimated selling price after processing the product beyond the split-off point. 
D) the constant NRV method uses an identical gross-margin percentage for each product to allocate joint costs 
A) it is better to use a product's market value at the split-off point than its estimated NRV 
B) the estimated NRV at the split-off point is calculated by taking the sales value after further processing and deducting additional processing costs 
C) NRV is the estimated selling price after processing the product beyond the split-off point. 
D) the constant NRV method uses an identical gross-margin percentage for each product to allocate joint costs

Question 4

Which of the following factors would NOT be one of the reasons why the sales value at the split-off would be used to allocate joint costs?

Accepted Answer

A) the sales value method is a good measure of benefits received 
B) it helps determine manager compensation and performance evaluation 
C) it is a method that is independent of further processing decisions 
D) it provides a common allocation basis 
A) the sales value method is a good measure of benefits received 
B) it helps determine manager compensation and performance evaluation 
C) it is a method that is independent of further processing decisions 
D) it provides a common allocation basis

Question 5

Torid Company processes 18,175 gallons of direct materials to produce two products,Product X and Product Y.Product X sells for $6 per gallon and Product Y,the main product,sells for $190 per gallon.The following information is for December:
 
The manufacturing costs totalled $29,000.
If the byproduct inventory is recorded at NRV less profit margin of 40%,the balance sheet will report ________ of byproduct inventory.

Accepted Answer

A) $900 
B) $0 
C) $3800 
D) $540 
A) $900 
B) $0 
C) $3800 
D) $540

Question 6

Which of the following statements is true of sell-or-process-further decisions in joint costing?

Accepted Answer

A) Joint costs incurred before the split-off point are relevant in deciding whether to process the product further. 
B) All separable costs in joint-cost allocations are incremental costs. 
C) Separable costs incurred before the split-off point are irrelevant in deciding whether to process the product further. 
D) Costs that differ between the alternatives of selling products or processing further are relevant. 
A) Joint costs incurred before the split-off point are relevant in deciding whether to process the product further. 
B) All separable costs in joint-cost allocations are incremental costs. 
C) Separable costs incurred before the split-off point are irrelevant in deciding whether to process the product further. 
D) Costs that differ between the alternatives of selling products or processing further are relevant.

Question 7

When a product is the result of a joint process,the decision to process the product past the split-off point further should be influenced by which of the following measures?

Accepted Answer

A) the product's proportion of the total costs 
B) the portion of the joint costs allocated to the individual products 
C) the extra revenue earned past the split-off point 
D) the incremental operating income earned past the split-off point 
A) the product's proportion of the total costs 
B) the portion of the joint costs allocated to the individual products 
C) the extra revenue earned past the split-off point 
D) the incremental operating income earned past the split-off point

Question 8

Explain why some companies choose not to allocate joint costs to products.

Accepted Answer

Some companies choose not to allocate jo

Question 9

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 400 kgs of direct materials and processing it up to the split-off point to yield a total of 20,400 chips of good products was $2,020,000.Beginning inventories totalled 130 chips for Standard and 60 chips for Premium.Ending inventory amounts reflected 130 chips of Standard and 60 chips of Premium.October costs per unit were the same as November.What are the physical-volume proportions for products Standard and Premium,respectively?

Accepted Answer

A) 64.29% and 35.71% 
B) 66.33% and 33.67% 
C) 63.73% and 36.27% 
D) 50.00% and 50.00% 
A) 64.29% and 35.71% 
B) 66.33% and 33.67% 
C) 63.73% and 36.27% 
D) 50.00% and 50.00%

Question 10

Which of the following formulas would calculate the net realizable value of a product?

Accepted Answer

A) sales value at the split-off point less cost to produce up to the split-off point 
B) sales value x constant gross-margin 
C) final sales value minus cost of goods sold 
D) final sales value minus separable costs 
A) sales value at the split-off point less cost to produce up to the split-off point 
B) sales value x constant gross-margin 
C) final sales value minus cost of goods sold 
D) final sales value minus separable costs

When the selling prices of all products at the split-off point are unavailable,the ________ is the best alternative for allocating joint costs.

Which of the following journal entries can happen only under the production method of recording byproducts?

Which of the following is false regarding net realizable value (NRV)?

Which of the following factors would NOT be one of the reasons why the sales value at the split-off would be used to allocate joint costs?

Which of the following statements is true of sell-or-process-further decisions in joint costing?

When a product is the result of a joint process,the decision to process the product past the split-off point further should be influenced by which of the following measures?

Explain why some companies choose not to allocate joint costs to products.

Which of the following formulas would calculate the net realizable value of a 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

When the selling prices of all products at the split-off point are unavailable,the ________ is the best alternative for allocating joint costs.

Which of the following journal entries can happen only under the production method of recording byproducts?

Which of the following is false regarding net realizable value (NRV)?

Which of the following factors would NOT be one of the reasons why the sales value at the split-off would be used to allocate joint costs?

Which of the following statements is true of sell-or-process-further decisions in joint costing?

When a product is the result of a joint process,the decision to process the product past the split-off point further should be influenced by which of the following measures?

Explain why some companies choose not to allocate joint costs to products.

Which of the following formulas would calculate the net realizable value of a 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