Deck 15: Cost Allocation: Joint Products and Byproducts

Question 1

Scrap frequently has a zero sales value.

Answer 1

True

Question 2

What type of cost is the result of an event that results in multiple products simultaneously?

A)byproduct cost
B)joint cost
C)main cost
D)separable cost
E)splitoff cost

Answer 2

B

Question 3

Costs which are assignable beyond the splitoff point at which individual products emerge are called

A)byproduct cost.
B)joint cost.
C)main cost.
D)separable cost.
E)splitoff costs.

Answer 3

D

Question 4

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

Question 5

Which of the following statements is TRUE regarding main products, byproducts, and scrap?

A)Product classifications do not change over the short-run.
B)Product classifications do not change over the long-run.
C)Product classifications may change over time.
D)The cause-and-effect criterion determines the classification.
E)The distinctions between main products, byproducts, and scrap are well-established in practice.

Question 6

There are no logical reasons for allocating joint costs.

Question 7

Joint costs are incurred beyond the splitoff point and are assignable to individual products.

Question 8

A byproduct has a minimal sales value.

Question 9

The costs of production that yield multiple products simultaneously are known as joint costs.

Question 10

Which of the following is FALSE concerning manufacturing of joint products and joint costing?

A)The number of outputs produced may exceed the number of products.
B)An output from the process may be recycled without any value being added by its production.
C)Some outputs from a joint process have no value and are not recognized in the accounting system.
D)The physical quantity of outputs not recognized in the accounting system, can exceed the quantities of outputs that recognized in the accounting system.
E)Joint processes always yield either scrap or byproducts.

Question 11

All of the following changes may indicate a change in product classification of a manufacturing process which has a splitoff point EXCEPT

A)scrap items increase in sales value.
B)a main product becomes a joint product.
C)a main product becomes technologically obsolete.
D)a byproduct loses its market due to a new invention.
E)a byproduct increases in market value.

Question 12

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

Question 13

Which of the following is NOT a reason to allocate joint cost?

A)rate regulation requirements, if applicable
B)cost of goods sold computations
C)insurance settlement cost information requirements
D)customer profitability analysis
E)cause-and-effect analysis

Question 14

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.
E)byproducts and scrap.

Question 15

Separable costs include manufacturing costs only.

Question 16

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

Question 17

Byproducts and scrap are differentiated by

A)number of units per processing period.
B)weight or volume of outputs per period.
C)management preference only.
D)the amount of sales value per unit.
E)the amount of costs assigned to each unit.

Question 18

Products with a zero sales value are known as

A)scrap.
B)main products.
C)joint products.
D)byproducts.
E)separable products.

Question 19

The products of a joint production process that have low total sales values compared with the total sales value of the main product are called joint products.

Question 20

Separable costs are assignable after the splitoff point.

Question 21

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of processing pulp into paper.

Question 22

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of raw tomato processing, tomatoes are to be used for different soups in a soup plant.

Question 23

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of processing lumber into different lengths and sizes at a sawmill.

Question 24

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Fuel oil from petroleum processing

Question 25

A business which enters into a contract to purchase a product (or products)and will compensate the manufacturer under a cost reimbursement formula, should take an active part in the determination of how joint costs are allocated because

A)it is important in the understanding of the cause-and-effect relationship.
B)if the manufacturer successfully allocates a large portion of its costs to these products then it will be able to sell its other nonreimbursed products at lower prices.
C)the ASPE/IFRS requires the business to participate in the cost allocation process.
D)they are used in the calculation of the suppliers inventoriable costs.
E)sales discounts often depend on joint cost allocation amounts.

Question 26

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of processing water into different sized bottles for human consumption.

Question 27

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Raw milk for dairy processing

Question 28

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Broth from cooking food

Question 29

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of processing timber (trees)at a sawmill.

Question 30

Which of the following is NOT a reason underlying the importance of allocations for inventory costing and cost of goods sold computations?

A)Inventory costing is essential for proper balance sheet presentation.
B)Divisional profitability may affect compensation for divisional managers.
C)Cost of goods sold is an important component in the determination of net income.
D)The information may be required for insurance settlement or litigation.
E)Sell work-in -process or process further decisions prior to the splitoff point.

Question 31

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of processing crude oil in a gasoline refinery.

Question 32

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of moulding plastic for use in making different toys on an assembly line.

Question 33

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Bones from a butcher shop

Question 34

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Sawdust from a furniture manufacturer

Question 35

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Salt from a salt works process

Question 36

Assigning joint costs when only a portion of a business's products are sold to a single customer is an example of which of the following?

A)inventory costing for external financial statements
B)customer profitability analysis
C)rate regulation requirements
D)price regulation
E)cost reimbursement

Question 37

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of canning soup in a soup plant.

Question 38

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Sawdust from a sawmill

Question 39

Match each of the following costs with the appropriate joint production process cost classification.

A)separable cost
B)joint cost
Cost of refining gasoline for use in automobiles.

Question 40

Which of the following is TRUE regarding the costs of toxic waste disposal, reclamation, and remediation that result from joint production processing?

A)Toxic waste costs are treated in the same manner byproduct costs.
B)Disposal costs should be expensed, other costs charged to cost of goods sold.
C)The costs should be valued in inventory at net realizable value.
D)Toxic waste costs are a life-cycle cost that should be added to joint production costs prior to allocation.
E)All toxic waste costs should be expensed as do not form part of the product.

Question 41

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

Question 42

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What are the pencil casings' sales value at the split-off point?

A)$300
B)$1,480
C)$3,000
D)$3,750
E)$4,500

Question 43

One problem with the physical measure method of allocation is that the physical weights used for allocating joint costs may have no relation to the product's ability to produce revenue.

Question 44

Golden Company uses one raw material, gold ore, for all its products.It spends considerable time getting the gold 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 requires difficult extraction methods.Required:
Can you explain how the company might change its accounting system to better reflect the reporting problems? Are there other problems with the purchasing area?

Question 45

An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task.

Question 46

It is easier to cost inventory if the joint products are sold before the splitoff point without further processing.

Question 47

What are separable costs?

Question 48

The sales value at splitoff method can be used to value inventory as well as determining cost of goods sold.

Question 49

The sales value at splitoff method allocates joint costs according to each product's value, at the splitoff point, of the total production in the accounting period of each product.

Question 50

Which of the following statements is TRUE in regard to the cause-and-effect relationship between allocated joint costs and individual products?

A)A high individual product value results in a high level of joint costs.
B)A low individual product value results in a low level of joint costs.
C)A high individual product value results in a low level of joint costs.
D)The cause-and-effect relationship depends on the relative costs to be incurred after splitoff.
E)There is no cause-and-effect relationship.

Question 51

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 52

Match each of the following costs with the appropriate joint production process cost classification.

A)scrap
B)joint product
C)byproduct
D)main product
Skim milk from dairy processing

Question 53

What are a joint cost and a splitoff point?

Question 54

The cause-and-effect criterion is not present when joint costing is used.

Question 55

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What are the paper's and the pencil's approximate weighted cost proportions using the sales value at splitoff method, respectively?

A)28.57% and 71.43%
B)33.33% and 66.67%
C)40% and 60%
D)49.00% and 51.00%
E)50.00% and 50.00%

Question 56

A major deficiency of the sales value at splitoff method is that this method does not allow management to obtain individual product costs and gross margin information.

Question 57

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What is the paper's sales value at the splitoff point?

A)$120
B)$1,160
C)$1,200
D)$1,950
E)$3,000

Question 58

Under the benefits-received criterion, the physical measures method is less desirable that the sales value at splitoff method.

Question 59

How should toxic waste be accounted for?

Question 60

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

Question 61

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What are the approximate joint costs assigned to the paper ending inventory if joint costs are allocated using the sales value at splitoff method?

A)$14.29
B)$50.00
C)$428.55
D)$435.00
E)$750.00

Question 62

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
The Arvid Corporation manufactures widgets, gizmos, and turnbols from a joint process.May production is 4,000 widgets; 7,000 gizmos; and 8,000 turnbols.Respective per unit selling prices at splitoff are $15, $10, and $5.Joint costs up to the splitoff point are $75,000.If joint costs are allocated based upon the sales value at splitoff, what amount of joint costs will be allocated to the widgets?

A)$30,882
B)$26,471
C)$17,647
D)$28,125
E)$60,000

Question 63

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
Which method allocates joint costs on the basis of each product's relative sales value at the splitoff point?

A)the constant gross margin percentage NRV method
B)the estimated net realizable value method
C)the physical measure method
D)the sales value at splitoff method
E)the splitoff method

Question 64

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What are the respective physical volume proportions for products X and Y?

A)55.00% and 45.00%
B)54.00% and 46.00%
C)52.63% and 47.37%
D)47.37% and 53.63%
E)36.36 % and 63.64%

Question 65

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What is the approximate portion of the joint costs that should be allocated to products X and Y, respectively, using a physical volume measure?

A)$461,858 and $513,142
B)$487,500 and $487,500
C)$513,142 and $461,858
D)$529,285 and $445,715
E)$530,000 and $470,000

Question 66

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What is the approximate cost assigned to the pencil casings if joint costs are allocated using the sales value at splitoff method?

A)$750
B)$765
C)$1,005
D)$1,071
E)$1,500

Question 67

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
An advantage of the sales value at splitoff method is

A)the fact that it can be supported subjectively.
B)the fact that only a few assumptions are required beyond the splitoff point.
C)the fact that there may not be a ready market at the splitoff point.
D)it always yields the same results as the gross margin percentage method.
E)the cost allocation base is well understood.

Question 68

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What method is used when joint costs are allocated according to each item's relative proportion of weight at the splitoff point?

A)direct proportion method
B)proportional value method
C)physical measure method
D)weighted sales value method
E)constant margin method

Question 69

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
Which of the following is FALSE concerning the physical measure method?

A)Technical personnel outside of accounting may be required in the joint costing determinations.
B)Using the benefits-received criterion, the physical measure method less preferred than the sales at splitoff method.
C)The physical measure may not reflect each individual product's ability to generate revenues.
D)Using a common physical measure can result in the product with the lowest revenue-producing power having the most costs assigned to it.
E)It results in a constant gross margin for all products.

Question 70

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
Advantages of the sales value at splitoff method include all of the following EXCEPT

A)it does not presuppose an exact number of subsequent steps for further processing.
B)it uses a meaningful denominator.
C)there is no anticipation of subsequent management decisions.
D)it is simple.
E)the allocation of joint costs could lead managers to make poor decisions.

Question 71

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What is product Y's approximate joint production cost if the sales value at splitoff point method is used?

A)$365,625
B)$419,250
C)$458,250
D)$600,000
E)$609,375

Question 72

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
Two finished products, [A & B], are sold for $16 a unit and $24 a unit, respectively.Each product can also be sold at the splitoff point.Product A can be sold for $10 and Product B for $8.Joint costs for the two products totalled $8,000 for January for 600 units of A and 500 units of B.What are the respective joint costs assigned to each unit of products A and B if the sales value at splitoff method is used?

A)$5.92 and $8.88
B)$6.40 and $14.40
C)$6.40 and $9.10
D)$8.00 and $9.10
E)$8.00 and $6.40

Question 73

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
In rate regulation settings, which method is usually preferred over the sales value method?

A)constant gross margin percentage NRV method
B)estimated net realizable method
C)physical measure method
D)sales value at splitoff method
E)rate regulation method

Question 74

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What is the approximate production cost per unit for each pencil casing if the sales value at splitoff method is used?

A)$0.0250
B)$0.0255
C)$0.0335
D)$0.0357
E)$0.0533

Question 75

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What is Product X's approximate production cost per unit using the physical volume method?

A)$0.10
B)$10.23
C)$53.15
D)$55.00
E)$102.63

Question 76

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
Product X is sold for $8 a unit and Product Y is sold for $12 a unit.Each product can also be sold at the splitoff point.Product X can be sold for $5 and Product Y for $4.Joint costs for the two products totaled $4,000 for January for 600 units of X and 500 units of Y.What are the respective joint costs assigned to each unit of products X and Y if the sales value at splitoff method is used?

A)$2.96 and $4.44
B)$4.00 and $4.55
C)$4.00 and $3.20
D)$4.55 and $4.55
E)$3.20 and $4.00

Question 77

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What is product X's approximate gross margin percentage using the physical volume method?

A)30%
B)32%
C)33%
D)35%
E)38%

Question 78

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
If joint products end up with the same gross margin percentage, which of the following is TRUE?

A)The cost allocation method assigned the same cost per unit to each product.
B)The physical measure method must have been used.
C)The gross margin percentage NRV method must have been used.
D)The estimated net realizable method must have been used.
E)If all products are sold at the splitoff point, and there were no opening inventories, the sales value at splitoff method could have been used.

Question 79

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
What is the approximate amount of joint costs in Product Y's ending inventory if the physical volume method is used and the company uses the FIFO inventory method?

A)$50,917
B)$53,883
C)$60,145
D)$60,285
E)$67,358

Question 80

Use the information below to answer the following question(s).Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff 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.Trees processed:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
What is the paper's production approximate cost per unit if the sales value at splitoff method is used?

A)$0.0143
B)$0.0150
C)$0.0250
D)$0.0259
E)$0.0300