Deck 15: Cost Allocation: Joint Products and Byproducts

Question 1

Scrap frequently has a zero sales value.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

Separable costs include manufacturing costs only.

Question 6

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 7

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.

Question 8

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 9

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

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

A byproduct has a minimal sales value.

Question 12

Separable costs are assignable after the splitoff point.

Question 13

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 14

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 15

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 16

There are no logical reasons for allocating joint costs.

Question 17

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

Question 18

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

Question 19

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 20

Products with a zero sales value are known as

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

Question 21

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

Question 22

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 23

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 24

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 25

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 26

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

Question 27

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 28

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

Question 29

What are separable costs?

Question 30

What are a joint cost and a splitoff point?

Question 31

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 32

How should toxic waste be accounted for?

Question 33

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

Question 34

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 35

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 36

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 37

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 38

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 39

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

Question 40

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

Question 41

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

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 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 43

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 44

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 45

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 46

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 47

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 48

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 49

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 50

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 51

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 52

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 53

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 54

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 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 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 56

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 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

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 59

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 60

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 61

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 62

Yip Manufacturing purchases trees from Cheney Lumber 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 May:

The cost of purchasing 100 trees and processing them up to the splitoff point to yield 70,000 sheets of paper and 60,000 pencil casings is $3,000.
Yip's Manufacturing's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.
What are the paper's and the pencils' approximate weighted cost proportions using the sales value at splitoff method,respectively?

A)50.00% and 50.00%
B)33.33% and 66.67%
C)31.82% and 68.18%
D)54.00% and 46.00%
E)53.00% and 47.00%

Question 63

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Assuming Cranbrook uses the sales value at splitoff method and 2,000 containers of Jarlon and 75 containers of Kharton are unsold at the end of the period,Cranbrook would report ending inventory of

A)$38,272.
B)$56,598.
C)$53,560.
D)$79,240.
E)$58,100.

Question 64

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the physical measures method,the weightings for joint cost allocations for Jarlon and Kharton respectively are

A)27.62% and 72.38%.
B)80.00% and 20.00%.
C)39.58% and 60.42%.
D)72.38% and 27.62%.
E)60.42% and 39.58%.

Question 65

Answer the following question(s)using the information below:
The Morton Company processes unprocessed goat milk up to the splitoff point where two products,condensed goat milk and skim goat milk result.The following information was collected for the month of October:
Direct materials processed: 65,000 litres (shrinkage was 10%)
The costs of purchasing the 65,000 litres of unprocessed goat milk and processing it up to the splitoff point to yield a total of 58,500 litres of salable product was $72,240.There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 19,500 litres (the remainder is shrinkage)of a medicinal milk product,Xyla,for an additional processing cost of $3 per usable litre.Xyla can be sold for $18 per litre.
Skim goat milk can be processed further to yield 28,100 litres of skim goat ice cream,for an additional processing cost per usable litre of $2.50.The product can be sold for $9 per litre.
There are no beginning and ending inventory balances.
Using the sales value at splitoff method,what is the gross margin percentage for skim goat milk at the splitoff point?

A)21.1%
B)55.1%
C)58.1%
D)38.2%
E)41.9%

Question 66

Use the information below to answer the following questions:
Argon Manufacturing Company processes direct materials up to the splitoff point where two products (U and V)are obtained and sold.The following information was collected for last quarter of the calendar year:
Direct materials processed: 20,000 gallons (20,000 gallons yield 19,000 gallons of good product and 1,000 gallons of shrinkage)
The cost of purchasing 20,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 19,000 gallons of good products was $1,950,000.
Beginning inventories totaled 100 gallons for U and 50 gallons for V.Ending inventory amounts reflected 600 gallons of Product U and 1,050 gallons of Product V.October costs per unit were the same as November.
What are the physical-volume proportions for products U and V,respectively?

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

Question 67

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the physical measures method,the joint costs allocated to Jarlon would be

A)$320,000.
B)$112,000.
C)$405,328.
D)$448,000.
E)$289,520

Question 68

Answer the following question(s)using the information below.
The Oxnard Corporation processes a liquid component up to the splitoff point where two products,Mr.DirtOut and Mr.SinkClean,are produced and sold.There was no beginning inventory.The following material was collected for the month of January:
Direct materials processed: 250,000 litres (242,500 litres of good product)
The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.
When using a physical volume measure,what is the approximate amount of joint costs that will be allocated to Mr.DirtOut and Mr.SinkClean?

A)$231,116 and $148,884
B)$224,200 and $155,800
C)$227,202 and $152,798
D)$155,800 and $224,200
E)$148,884 and $231,116

Question 69

Answer the following question(s)using the information below.
The Oxnard Corporation processes a liquid component up to the splitoff point where two products,Mr.DirtOut and Mr.SinkClean,are produced and sold.There was no beginning inventory.The following material was collected for the month of January:
Direct materials processed: 250,000 litres (242,500 litres of good product)
The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.
What are the physical volume proportions to allocate joint costs for Mr.DirtOut and Mr.SinkClean,respectively?

A)59.00% and 41.00%
B)60.82% and 39.18%
C)39.18% and 60.82%
D)59.79% and 40.21%
E)41.00% and 59.00%

Question 70

Answer the following question(s)using the information below.
The Oxnard Corporation processes a liquid component up to the splitoff point where two products,Mr.DirtOut and Mr.SinkClean,are produced and sold.There was no beginning inventory.The following material was collected for the month of January:
Direct materials processed: 250,000 litres (242,500 litres of good product)
The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.
When using the physical measures method,what is Mr.DirtOut's approximate production cost per unit?

A)$1.52
B)$1.54
C)$1.57
D)$1.61
E)$1.01

Question 71

Answer the following questions using the information below:
Yakima Manufacturing purchases trees from Cheney Lumber 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 November:
The cost of purchasing 100 trees and processing them up to the splitoff point to yield 60,000 sheets of paper and 60,000 pencil casings is $3,000.
Yakima's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.
If the sales value at splitoff method is used,what are the approximate joint costs assigned to ending inventory for paper?

A)$28.58
B)$100.00
C)$870.00
D)$1,500.00
E)$80.00

Question 72

Answer the following question(s)using the information below:
The Morton Company processes unprocessed goat milk up to the splitoff point where two products,condensed goat milk and skim goat milk result.The following information was collected for the month of October:
Direct materials processed: 65,000 litres (shrinkage was 10%)
The costs of purchasing the 65,000 litres of unprocessed goat milk and processing it up to the splitoff point to yield a total of 58,500 litres of salable product was $72,240.There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 19,500 litres (the remainder is shrinkage)of a medicinal milk product,Xyla,for an additional processing cost of $3 per usable litre.Xyla can be sold for $18 per litre.
Skim goat milk can be processed further to yield 28,100 litres of skim goat ice cream,for an additional processing cost per usable litre of $2.50.The product can be sold for $9 per litre.
There are no beginning and ending inventory balances.
Using the sales value at splitoff method,what is the gross margin percentage for condensed goat milk at the splitoff point?

A)21.1%
B)55.1%
C)58.1%
D)38.2%
E)41.9%

Question 73

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 74

Answer the following questions using the information below:
Yakima Manufacturing purchases trees from Cheney Lumber 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 November:
The cost of purchasing 100 trees and processing them up to the splitoff point to yield 60,000 sheets of paper and 60,000 pencil casings is $3,000.
Yakima's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.
If the sales value at splitoff method is used,what is the approximate production cost for each pencil casing?

A)$0.0250
B)$0.0255
C)$0.0335
D)$0.0357
E)$0.0422

Question 75

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the physical measures method,the joint costs allocated to Kharton would be

A)$320,000.
B)$112,000.
C)$154,672.
D)$448,000.
E)$110,480.

Question 76

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the sales value at splitoff method,the joint costs allocated to Kharton would be

A)$289,520.
B)$115,808.
C)$110,480.
D)$154,672.
E)$405,328.

Question 77

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Assuming Cranbrook uses the physical measures method and 2,000 containers of Jarlon and 75 containers of Kharton are unsold at the end of the period,Cranbrook would report cost of goods sold of

A)$58,100.
B)$506,400.
C)$358,500.
D)$143,400.
E)$501,900.

Question 78

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the sales value at splitoff method,the joint costs allocated to Jarlon would be

A)$289,520.
B)$115,808.
C)$405,328.
D)$110,480.
E)$154,672.

Question 79

Use the information below to answer the following question(s).
Cranbrook Chemical Ltd.manufactures two industrial compounds.In the month of May,15,000 litres of direct material costing $160,000 were processed at a cost of $400,000.The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton.The respective selling prices of Jarlon and Kharton are $38 and $58.Both products may be processed further.Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product.The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively.The selling price of Jaxton is $48 per jar.The selling price of Kraxton is $102 per jar.
Using the sales value at splitoff method,the percentage weightings for joint cost allocations for Jarlon and Kharton respectively are

A)27.62% and 72.38%.
B)80.00% and 20.00%.
C)39.58% and 60.42%.
D)72.38% and 27.62%.
E)60.42% and 39.58%.

Question 80

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