Question 1

Which is not a common method used to allocate costs under the departmental approach?

Accepted Answer

A)  Dual method.
B)  Step method.
C)  Reciprocal method.
D)  Direct method. A

Question 2

The amount of joint costs allocated to product DBB-1 using the net realizable value method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $2,009,160.
B)  $286,500.
C)  $881,640.
D)  $667,345.
E)  $709,200. E

Question 3

Cost allocation of shared facilities cost is intended to remind managers of:

Accepted Answer

A)  The cost of using a shared resource.
B)  Both the cost and value of using shared resources.
C)  How much capacity a firm has.
D)  Why the firm invests in these facilities.
E)  How dependent the managers are for these facilities. B

Question 4

The total cost accumulated in the marketing department using the step method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $100,000.
B)  $104,000.
C)  $126,000.
D)  $130,000.
E)  $135,000.

Question 5

In making decisions about whether to sell or further process joint products, allocation of common or joint costs is:

Accepted Answer

A)  Essential.
B)  Useful.
C)  Irrelevant.
D)  Is useful depending on the method chosen.
E)  Is the only way to get the true total product cost.

Question 6

Dual allocation is a cost allocation approach that separates direct and indirect costs, tracing the direct costs directly to the cost object that:

Accepted Answer

A)  Can bear the cost.
B)  Relates best to the cost.
C)  Is first identified with the cost.
D)  Caused the cost.
E)  Is most impacted by the cost.

Question 7

The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $939,240.
B)  $216,870.
C)  $447,120.
D)  $757,800.
E)  $2,213,640.

Question 8

Which of the following is not a "production" department in a service firm?

Accepted Answer

A)  Accounting department.
B)  Operations department.
C)  Marketing department.
D)  Factory engineering and maintenance.

Question 9

The total cost accumulated in the sales department using the step method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $100,000.
B)  $104,000.
C)  $126,000.
D)  $130,000.
E)  $135,000.

Question 10

The mathematical technique that underlies the reciprocal cost allocation method is:

Accepted Answer

A)  Regression analysis.
B)  Simultaneous equations.
C)  Analysis of variances.
D)  Complex algebraic functions.
E)  Multiple correlation.

Question 11

Which of the following methods considers all reciprocal flows between service departments through simultaneous equations?

Accepted Answer

A)  Dual method.
B)  Step method.
C)  Reciprocal method.
D)  Direct method.
E)  The net realizable value method.

Question 12

The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $102,750.
B)  $114,600.
C)  $85,800.
D)  $131,250.
E)  $135,000.

Question 13

The total cost accumulated in the finishing department using the reciprocal method is(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $1,890,000.
B)  $627,143.
C)  $682,551
D)  $1,062,857.
E)  $1,007,449.

Question 14

The amount of joint costs allocated to product X using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $19,280.
B)  $42,450.
C)  $23,222.
D)  $48,950.
E)  $56,000.

Question 15

The total cost accumulated in the sales department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $102,222.
B)  $122,402.
C)  $127,778.
D)  $142,471.
E)  $150,050.

Question 16

Which one of the following methods of cost allocation is completed by taking the service flows to production departments only and determining each production department's share of that service?

Accepted Answer

A)  Direct method.
B)  Indirect method.
C)  Step method.
D)  Reciprocal method.
E)  Cross-functional method.

Question 17

Which of the following is not a phase of the departmental approach?

Accepted Answer

A)  Trace all direct manufacturing costs.
B)  Allocate the production department costs to the products.
C)  Allocate overhead costs to direct costs.
D)  Allocate the service department costs to the production departments.

Question 18

The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $1,033,333.
B)  $1,690,000.
C)  $686,667.
D)  $646,667.
E)  $693,333.

Question 19

Which one of the following methods of allocating joint costs uses a measure of weight, size or number of units to allocate joint costs to joint products?

Accepted Answer

A)  Net realizable value method.
B)  Physical unit method.
C)  Product measure method.
D)  Cost measure method.
E)  Sales value at split-off method.

Question 20

The amount of joint costs allocated to product X using the net realizable value method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

Accepted Answer

A)  $24,000.
B)  $21,333.
C)  $36,444.
D)  $40,842.
E)  $32,110.

Exam 7: Cost Allocation: Departments, Joint Products, and By-Products

Which is not a common method used to allocate costs under the departmental approach?

The amount of joint costs allocated to product DBB-1 using the net realizable value method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

Cost allocation of shared facilities cost is intended to remind managers of:

The total cost accumulated in the marketing department using the step method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

In making decisions about whether to sell or further process joint products, allocation of common or joint costs is:

Dual allocation is a cost allocation approach that separates direct and indirect costs, tracing the direct costs directly to the cost object that:

The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

Which of the following is not a "production" department in a service firm?

The total cost accumulated in the sales department using the step method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar) :

The mathematical technique that underlies the reciprocal cost allocation method is:

Which of the following methods considers all reciprocal flows between service departments through simultaneous equations?

The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

The total cost accumulated in the finishing department using the reciprocal method is(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

The amount of joint costs allocated to product X using the physical measure method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

The total cost accumulated in the sales department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

Which one of the following methods of cost allocation is completed by taking the service flows to production departments only and determining each production department's share of that service?

Which of the following is not a phase of the departmental approach?

The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

Which one of the following methods of allocating joint costs uses a measure of weight, size or number of units to allocate joint costs to joint products?

The amount of joint costs allocated to product X using the net realizable value method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :