Question 1

A common cost
A)uses a common set of production costs, used in one common production process, to produce one product.
B)uses a common set of production costs used in one common production process to yield two products simultaneously.
C)uses a multiple set of production costs, used in one common production process to yield more than one product simultaneously.
D)uses a common set of production costs used in one common production process to yield more than one product simultaneously.

Accepted Answer

A common cost refers to costs that are incurred in a single production process that yields more than one product simultaneously.

Question 2

The split-off point is
A)the point in the process the products become separate and identifiable.
B)the point in the process, the company determines which product to process further.
C)the point in the production process where no further processing is needed.
D)the point in the process the product is ready to sell.

Accepted Answer

The split-off point is where joint products become separate and identifiable in the production process.

Question 3

A secondary product recovered in producing a primary product during the joint process that has future use is called
A)scrap.
B)waste.
C)a by-product.
D)a joint product.

Accepted Answer

A by-product is a secondary product that is recovered during the production of a primary product and has future use.

Question 4

All of the following statements about joint costs are true except:
A)Allocation is not necessary when costs are incurred using a joint process.
B)Joint costs are the costs incurred jointly in the production of two or more products.
C)The costs cannot be directly assigned to any one product involved.
D)Joint costs are incurred when making multiple products.

Accepted Answer

Allocation is necessary when costs are incurred using a joint process to determine the cost of each product produced.

Question 5

The cost of fertilizing and harvesting sunflowers is an example of:
A)joint products.
B)by-products
C)joint costs.
D)cost allocation.

Accepted Answer

Joint costs are costs incurred up to the split-off point in a process that produces multiple products, such as fertilizing and harvesting sunflowers.

Question 6

Molasses would be considered what type of unintended output from refining sugar?
A)Joint product.
B)Scrap.
C)Waste.
D)By-product.

Accepted Answer

Molasses is considered a by-product because it is a secondary product derived from the sugar refining process, which has some economic value.

Question 7

Harvesting of corn produces corn husks. In a joint process, what type of unintended output are corn husks?
A)Joint product.
B)Scrap.
C)Waste.
D)By-product.

Accepted Answer

The answer of Harvesting of corn produces corn husks. In...

Question 8

In a joint process, waste would be considered all of the following except:
A)Waste is an unintended output.
B)Waste has economic value.
C)Waste is disposed of.
D)Waste is a by-product.

Accepted Answer

Waste typically does not have economic value, which is why it is considered waste and is often disposed of.

Question 9

Once a company classifies an unintended output of the joint process as a by-product, waste, or scrap,
A)the company will continue that classification until it no longer produces the product.
B)the company will evaluate the classifications yearly.
C)the classifications will remain fluid and can change as the usefulness of the products changes.
D)the classifications will change based on the profitability of the product.

Accepted Answer

The classifications will remain fluid and can change as the usefulness of the products changes.

Question 10

The following costs are included in joint costs:
A)direct materials.
B)direct labor.
C)direct material and direct labor.
D)direct material, direct labor, and manufacturing overhead.

Accepted Answer

Joint costs include all costs incurred up to the split-off point, which typically include direct materials, direct labor, and manufacturing overhead.

Question 11

Separable costs are also known as
A)by-products.
B)joint costs.
C)further processing costs.
D)common costs.

Accepted Answer

Separable costs refer to the additional costs incurred to process a product further after the split-off point in a joint production process.

Question 12

Further processing costs are costs that
A)are incurred within the joint process.
B)are incurred to sell the product as is.
C)are incurred to create a by-product.
D)are incurred to process the product further.

Accepted Answer

Further processing costs are incurred to process the product beyond the split-off point to enhance its value or prepare it for sale.

Question 13

All of the following statements about joint products are true, except:
A)All joint products can be sold at the split-off point.
B)A product that is processed further should be sold for a higher price.
C)Management must make a decision at split-off to process further or sell the product.
D)There is no economic value attached to some products at the split-off point.

Accepted Answer

All joint products cannot be sold at the split-off point. Some joint products may have no economic value at the split-off point and must be processed further to have any value.

Question 14

Xander incurs costs of $20,000 for direct materials, $15,000 for direct labor, and $10,000 for manufacturing overhead. The costs incurred resulted in a single process that resulted in two products, Bugs, and Rugs. Bugs can be sold at split-off for $60,000 or be processed further at a cost of $15,000. The new product, Dubs, can be sold for $105,000. How much are Xander's joint costs?
A)$30,000.
B)$35,000.
C)$45,000.
D)$60,000.

Accepted Answer

$20,000 + $15,000 + $10,000 = $45,000.DM + DL + MOH (Before split-off)

Question 15

When manufacturing a wooden chair, sawdust would be an example of
A)Joint product.
B)Scrap.
C)Waste.
D)By-product.

Accepted Answer

The answer of When manufacturing a wooden chair, sawdust would...

Question 16

Which of the following is a by-product?
A)whole milk.
B)lumber.
C)honey.
D)fertilizer.

Accepted Answer

Fertilizer is a by-product of many industrial processes, such as the production of steel and chemicals.

Question 17

Which of the following statements best describes a by-product?
A)A product that has a selling price similar to that of the main product.
B)A product that is created along with the main product and the sales value does not cover its cost of production.
C)A product that is produced from material that would otherwise be scrapped.
D)A product that has a lower unit selling price than the main product.

Accepted Answer

A by-product is typically a secondary product derived from a manufacturing process that would otherwise result in waste or scrap.

Question 18

Which of the following are identifiable as different individual products before split-off for cost accumulate purposes? 
A)A.
B)B.
C)C.
D)D.

Accepted Answer

The answer of Which of the following are identifiable as...

Question 19

The _____ method of allocating joint costs uses pounds of product produced.
A)sales value at split-off.
B)net realizable value.
C)physical quantities.
D)weighted average.

Accepted Answer

The physical quantities method allocates joint costs based on the physical measure, such as pounds, gallons, or units, of the product produced.

Question 20

The method of allocating joint costs that would assign the same amount of cost per unit to two joint products that sell for $5 and $15, respectively, is the
A)sales value at split-off method.
B)net realizable value method.
C)physical quantities method.
D)direct allocation method.

Accepted Answer

The physical quantities method allocates joint costs based on the physical measure of the products, such as weight or volume, resulting in the same cost per unit regardless of sales value.

Quiz 15: Joint Costs and Decision-Making

A common cost

The split-off point is

A secondary product recovered in producing a primary product during the joint process that has future use is called

All of the following statements about joint costs are true except:

The cost of fertilizing and harvesting sunflowers is an example of:

Molasses would be considered what type of unintended output from refining sugar?

Harvesting of corn produces corn husks. In a joint process, what type of unintended output are corn husks?

In a joint process, waste would be considered all of the following except:

Once a company classifies an unintended output of the joint process as a by-product, waste, or scrap,

The following costs are included in joint costs:

Separable costs are also known as

Further processing costs are costs that

All of the following statements about joint products are true, except:

When manufacturing a wooden chair, sawdust would be an example of

Which of the following is a by-product?

Which of the following statements best describes a by-product?

Which of the following are identifiable as different individual products before split-off for cost accumulate purposes?

The _____ method of allocating joint costs uses pounds of product produced.

The method of allocating joint costs that would assign the same amount of cost per unit to two joint products that sell for $5 and $15, respectively, is the