Deck 16: Cost Allocation: Joint Products and Byproducts

Question 1

The juncture in a joint production process when two products become separable is the byproduct point.

Answer 1

False
Explanation:The juncture in a joint production process when two products become separable is the split-off point.

Question 2

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

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

Answer 2

C

Question 3

Before the split-off point,decisions relating to the sale or further processing of each identifiable product cannot be made independently of decisions about the other products.

Answer 3

True

Question 4

Joint costs are incurred beyond the split-off point and are assignable to individual products.

Question 5

Joint costs are the costs of a production process that yields multiple products simultaneously.

Question 6

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

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

Question 7

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

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 8

The challenge of a production facility that is producing several products from is how to allocate the joint costs that are incurred ________.

A)before the split-off point
B)after the split-off point
C)at the split-off point
D)at the end of production

Question 9

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

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 10

Which of the following statements best define 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 11

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

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

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

Question 13

Separable costs include manufacturing costs only.

Question 14

Which of the following factors would guide you in classifying a product as a main product or byproduct?

A)Number of units per processing period
B)Weight or volume of outputs per period
C)Percentage of total sales value
D)Joint costs incurred up to the split-off point

Question 15

Timber logs are processed into standard lumber used in home construction and wood chips that will be sold to landscapers.How would these products be classified?

A)primary products
B)main products
C)joint products
D)a primary product and a byproduct

Question 16

Which of the following statements is true of joint costing?

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 17

Outputs with a negative sales value because of disposal costs have which of the following impact on costs?

A)added to cost of goods sold
B)added to joint production costs and allocated to joint or main products
C)added to joint production costs and allocated to byproducts and scrap
D)subtracted from product revenue

Question 18

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 ________.

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

Question 19

When a single manufacturing process yields two products,one of which has a relatively high sales value compared to the other,the two products are respectively known as ________.

A)joint products and byproducts
B)joint products and scrap
C)main products and byproducts
D)main products and joint products

Question 20

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

Question 21

What are the reasons for allocating joint costs to individual products or services?

Question 22

Which of the following would not be a GAAP or managerial accounting reason for allocating joint costs?

A)to calculate cost of goods sold
B)to analyze the profitability of various products
C)for reimbursement of costs under a federal contract
D)to evaluate the performance of division managers

Question 23

An example of allocating joint costs using physical measures is allocating joint costs based on the ________.

A)sales value at split-off point
B)volume of the products produced
C)constant gross-margin percentage
D)net realizable value

Question 24

Which of the following statements is true of the methods for allocating joint 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 25

Silver Company uses one raw material,silver ore,for all of its products.It spends considerable time getting the silver from the ore before it starts the actual processing of the finished products,rings,lockets,etc.Traditionally,the company made one product at a time and charged the product with all costs of production,from ore to final inspection.However,in recent months,the cost accounting reports have been somewhat disturbing to management.It seems that some of the finished products are costing more than they should,even to the point of approaching their retail value.It has been noted by the accounting manager that this problem began when the company started buying ore from different parts of the world,some of which require difficult extraction methods.
Required:
Can you explain how the company might change its accounting system to reflect the reporting problems better? Are there other problems with the purchasing area?

Question 26

If the value of a byproduct drops significantly,it could also be viewed as a joint product.

Question 27

List three reasons why we allocate joint costs to individual products or services.Give an example of when the particular cost allocation reason would come into use.

Question 28

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.

Question 29

In each of the following industries,identify possible joint (or severable)products at the split-off point.
a.Coal
b.Petroleum
c.Dairy
d.Lamb
e.Lumber
f.Cocoa Beans
g.Christmas Trees
h.Salt
i.Cowhide

Question 30

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

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

Question 31

What are joint costs,separable costs,and a split-off point?

Question 32

Which of the following would explain why a company might need to follow very stringent rules that specify the way in which joint costs are assigned to products?

A)to satisfy a federal contract reimbursement stipulations
B)So that cost of goods sold is accurate for income tax purposes
C)to satisfy FASB
D)to increase market share

Question 33

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

Question 34

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

A)The net realizable value method uses the sales value of the units sold during the accounting period to allocate joint costs.
B)The sales value at split-off method always results in the same gross-margin percentage for all products.
C)The sales value at split-off method allocates joint costs to each product in proportion to the sales value of total production.
D)The net realizable value method results in the same joint production cost per unit for all products.

Question 35

Define the terms main product,joint product,and byproduct.Give at least one example of each type of product.

Question 36

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

Question 37

Allocating joint costs to individual products can be helpful for litigation settlement purposes in which the costs of joint products or services are key inputs.

Question 38

Explain the difference between a joint product and a byproduct.Can a byproduct ever become a joint product? Also,can a joint product ever become a byproduct?

Question 39

How does the sales value at split-off method allocate joint costs?

A)allocates joint costs to joint products on the basis of the relative total sales value at the split-off point
B)allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
C)allocates joint costs to joint products on the basis of relative NRV
D)allocates joint costs to joint products in a way that each product has an identical gross-margin percentage

Question 40

One of the reasons to allocate joint costs to individual products is to have costs reimbursed under a federal cost=plus contract.

Question 41

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. )

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

Question 42

The Alfarm Corporation processes raw milk up to the split-off 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:

The cost of purchasing 780,000 gallons of direct materials and processing it up to the split-off point to yield a total of 758,500 gallons of good product was $2,310,000.When using a physical-volume measure,what is the approximate amount of joint costs that will be allocated to cream and liquid skim? (Round intermediary percentages to the nearest hundredth. )

A)$1,350,657 and $959,343
B)$1,155,000 and $1,155,000
C)$1,345,524 and $964,476
D)$1,313,442 and $996,558

Question 43

The Alfarm Corporation processes raw milk up to the split-off 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:

The cost of purchasing 820,000 gallons of direct materials and processing it up to the split-off point to yield a total of 797,500 gallons of good product was $2,350,000.What are the physical-volume proportions to allocate joint costs for cream and liquid skim,respectively?

A)54.02% and 45.98%
B)55.55% and 44.45%
C)50.00% and 50.00%
D)53.17% and 46.83%

Question 44

The Alfarm Corporation processes raw milk up to the split-off 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:

The cost of purchasing 800,000 gallons of direct materials and processing it up to the split-off point to yield a total of 778,500 gallons of good product was $2,350,000.Which of the following statements about Alfarm's joint production costs is true?

A)The gross-margin percentage per gallon of Cream and Liquid skim are equal because joint costs are allocated based on the number of gallons.
B)The gross-margin percentage per gallon of Cream is higher than gross margin percentage per gallon of Liquid skim because of Cream's higher production volume.
C)The joint production cost per gallon of Cream and Liquid skim are equal because joint costs are allocated based on the number of gallons.
D)The joint production cost per gallon of Cream is higher than joint production cost per gallon of Liquid skim because of Cream's higher production volume.

Question 45

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. )

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

Question 46

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?

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 47

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. )

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

Question 48

Which of the following reasons explain why a physical-measure to allocate joint costs is less preferred than the sales value at split-off point?

A)a physical measure such as volume is difficult to estimate than sales value
B)physical volume usually has little relationship to the revenue producing power of products
C)a physical measure usually results in less costs being allocated to the product that weighs the most
D)customers will easily understand that the products are overpriced

Question 49

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?

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

Question 50

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 180,000 sheets of paper and 180,000 pencil casings is $15,000.
Bismite's accounting department reported no beginning inventory.
What are the paper's and the pencil's approximate weighted cost proportions using the sales value at
Split-off method,respectively?

A)50.00% and 50.00%
B)45.06% and 54.94%
C)48.54% and 51.46%
D)46.51% and 53.49%

Question 51

The Alfarm Corporation processes raw milk up to the split-off 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:

The cost of purchasing 760,000 gallons of direct materials and processing it up to the split-off point to yield a total of 738,000 gallons of good product was $2,350,000.When using the physical-volume method,what is Cream's approximate production cost per gallon? (Round intermediary percentages to the nearest hundredth. )

A)$2.64
B)$3.09
C)$3.18
D)$3.33

Question 52

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?

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

Question 53

Which of the following best describes how the constant gross-margin percentage NRV method allocates joint costs?

A)a gross margin is calculated and for each product and then the gross margin is deducted along with separable costs from the final sales value of a product to derive the joint cost allocation for a product
B)an overall gross margin is calculated and for each product and then the gross margin is deducted along with separable costs from the final sales value of a all the products produced in the joint processing and the allocations are then made based on physical volume measures
C)an overall gross margin is calculated and for each product the gross margin is deducted along with separable costs from the final sales value of a product to derive the joint cost allocation for the product
D)a gross margin is calculated and for each product and then gross margin is deducted along from the final sales value of a product to derive the joint cost allocation for a product.

Question 54

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

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

Question 55

How does the physical-measure method allocate joint costs?

A)allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
B)allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
C)allocates joint costs to joint products on the basis of the relative sales value at the split-off point
D)allocates joint costs to joint products on the basis of relative NRV

Question 56

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 16,800 chips of good products was $1,950,000.Beginning inventories totalled 140 chips for Standard and 90 chips for Premium.Ending inventory amounts reflected 140 chips of Standard and 90 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 Standard chips? (Round intermediary percentages to the nearest hundredth. )

A)$1,226,415
B)$1,189,623
C)$975,000
D)$1,160,640

Question 57

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. )

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

Question 58

How does the net realizable value method allocate joint costs?

A)allocates joint costs to joint products on the basis of a comparable physical measure at the split-off point
B)allocates joint costs to joint products on the basis of the relative sales value at the split-off point
C)allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
D)allocates joint costs to joint products on the basis of relative NRV

Question 59

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 330 trees and processing them up to the split-off point to yield 190,000 sheets of paper and 190,000 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 pencil
Casing? (Round intermediary percentages to the nearest hundredth. )

A)$0.035
B)$0.049
C)$0.034
D)$0.048

Question 60

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 310 trees and processing them up to the split-off point to yield 190,000 sheets of paper and 190,000 pencil casings is $13,500.
Bismite's accounting department reported no beginning inventory.
If the sales value at split-off method is used,what are the approximate joint costs assigned to ending inventory for paper? (Round intermediary percentages to the nearest hundredth. )

A)$355.29
B)$29.61
C)$497.34
D)$379.24

Question 61

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 100,500 gallons of saleable product was $191,480.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 $6 per usable gallon.Xyla can be sold for $21 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 $6.The product can be sold for $14 per gallon.
There are no beginning and ending inventory balances.
What is the estimated net realizable value of Xyla at the split-off point?

A)$453,600
B)$464,000
C)$630,000
D)$637,500

Question 62

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 29,500 gallons of saleable product was $49,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.What is the constant gross margin percent for Brital?

A)66%
B)29%
C)32%
D)41%

Question 63

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. )

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

Question 64

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 $186,480.There were no inventory balances of either product.Condensed goat milk may be processed further to yield 42,500 gallons (the remainder is shrinkage)of a medicinal milk product,Xyla,for an additional processing cost of $3 per usable gallon.Xyla can be sold for $21 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 $3.The product can be sold for $8 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 condensed goat milk at the split-off point? (Round intermediary percentages to the nearest hundredth. )

A)49.63%
B)50.00%
C)42.60%
D)50.37%

Question 65

Cola Drink Company processes direct materials up to the split-off point where two products,A and B,are obtained.The following information was collected for the month of July:



The cost of purchasing 3500 liters of direct materials and processing it up to the split-off point to yield a total of 2975 liters of good products was $7000.There were no inventory balances of A and B.
Product A may be processed further to yield 2000 liters of Product Z5 for an additional processing cost of $160.Product Z5 is sold for $60.00 per liter.There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 800 liters of Product W3 for an additional processing cost of $290.Product W3 is sold for $65 per liter.There was no beginning inventory and ending inventory was 25 liters.
What is Product Z5's estimated net realizable value at the split-off point?

A)$51,840
B)$83,840
C)$119,840
D)$120,000

Question 66

Beverage Drink Company processes direct materials up to the split-off point where two products,A and B,are obtained.The following information was collected for the month of July:



The cost of purchasing 3000 liters of direct materials and processing it up to the split-off point to yield a total of 2550 liters of good products was $7500.There were no inventory balances of A and B.
Product A may be processed further to yield 500 liters of Product Z5 for an additional processing cost of $170.Product Z5 is sold for $25 per liter.There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 1875 liters of Product W3 for an additional processing cost of $325.Product W3 is sold for $35 per liter.There was no beginning inventory and ending inventory was 25 liters.
If Product Z5 and Product W3 are produced,what are the expected sales values of production,respectively?

A)$65,625 and $12,500
B)$21,000 and $58,500
C)$17,500 and $46,875
D)$12,500 and $65,625

Question 67

Chem Manufacturing Company processes direct materials up to the split-off point where two products (X and Y)are obtained and sold.The following information was collected for the month of November:



The cost of purchasing 10,200 gallons of direct materials and processing it up to the split-off point to yield a total of 9500 gallons of good products was $1,050,000.
The beginning inventories totaled 35 gallons for X and 400 gallons for Y.Ending inventory amounts reflected 565 gallons of Product X and 1,515,000 gallons of Product Y.October costs per unit were the same as November.
Using the physical-volume method,what is Product X's approximate gross-margin percentage? (Round all intermediary calculations two decimal places. )

A)63%
B)56%
C)171%
D)68%

Question 68

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 104,000 gallons of saleable product was $186,480.There were no inventory balances of either product.Condensed goat milk may be processed further to yield 45,000 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 $19 per gallon.
Skim goat milk can be processed further to yield 57,200 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.
Using estimated net realizable value,what amount of the joint costs would be allocated Xyla and the skim goat ice cream? (Round intermediary percentage calculations to the nearest hundredth. )

A)$675,000 and $286,000
B)$130,984 and $55,496
C)$93,240 and $93,240
D)$86,448 and $100,032

Question 69

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 102,000 gallons of saleable product was $188,480.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 58,200 gallons of skim goat ice cream,for an additional processing cost per usable gallon of $4.The product can be sold for $12 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 split-off point?

A)$465,600
B)$476,000
C)$672,000
D)$680,000

Question 70

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:


The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 22,500 gallons of saleable product was $51,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.What is the allocated joint costs of Condensed Milk? (Round intermediary percentages to the nearest hundredth. )

A)$34,678
B)$16,324
C)$15,000
D)$35,800

Question 71

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. )

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

Question 72

Which of the methods of allocating joint costs usually is considered the simplest to implement?

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

Question 73

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. )

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

Question 74

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 33,000 gallons of saleable product was $89,450.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.What is the allocated joint costs of Butter Cream?

A)$34,600
B)$15,000
C)$61,925
D)$27,525

Question 75

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

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 76

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:


The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 23,000 gallons of saleable product was $48,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.Which of the following statements is true of Kenton's joint cost allocations?

A)The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the split-off point.
B)One product can receive negative joint costs allocations to bring the other unprofitable product to the overall average gross margin.
C)Kenton has chosen the easiest method for allocating its joint costs of production.
D)The gross profit percent of condensed milk is lower than the gross profit of butter cream.

Question 77

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

A)Under the cause-and-effect criterion,the physical-measure method is highly desirable.
B)Byproducts are never excluded from the denominator used in the physical-measure method.
C)The NRV method is never used when the selling prices of joint products vary frequently.
D)The sales value at split-off method follows the benefits-received criterion of cost allocation.

Question 78

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. )

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

Question 79

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?

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

Question 80

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:


The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 27,500 gallons of saleable product was $53,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.What is the allocated joint costs of Butter Cream? (Round intermediary percentages to the nearest hundredth. )

A)$33,580
B)$13,000
C)$35,600
D)$19,428