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72.
Which of the following cost items is not allocable as joint costs when a single
manufacturing process produces several main products and several by-products?
73.
Which of the following is not a step needed to maximize the profits from joint products?
74.
75.
For purposes of allocating joint costs to joint products, the estimated net realizable value
at split-off is equal to:
76.
The method of accounting for joint product costs that will produce the same gross margin
percentage for all products is the:
77.
78.
Net realizable value at the split-off point is used to allocate:
Costs After Split-off
Point
Incurred Joint
Costs
A.
No
No
B.
No
Yes
C.
Yes
No
D.
Yes
Yes
79.
80.
Bonanza Co. manufactures products X and Y from a joint process that also yields a by-
product, Z. Revenue from sales of Z is treated as a reduction of joint costs. Additional
information is as follows:
PRODUCTS
X
Y
Z
TOTAL
Units
produced
20,000
20,000
10,000
50,000
Joint costs
?
?
?
262,000
Sales
value at
split-off
$300,000
$150,000
$10,000
$460,000
Joint costs were allocated using the net realizable value method at the split-off point. The
joint costs allocated to product X were
81.
Great Falls Company makes two products, Wool Gloves and Wool Mittens. They are
initially processed from the same raw material and then, after split-off, further processed
separately. Additional information is as follows:
Gloves
Mittens
Total
Final Sales Price
$9,000
$6,000
$15,000
Joint Costs Prior to
Split-Off Point
?
?
6,600
Costs Beyond Split-Off
Point
$3,000
$3,000
6,000
What are the joint costs allocated to Gloves and Mittens assuming Great Falls uses the
estimated net realizable value approach?
Gloves
Mittens
A.
$3,300
$3,300
B
$3,960
$2,640
C.
$4,400
$2,200
D.
$4,560
$2,040
82.
Atkinson, Inc., manufactures products A, B, and C from a common process. Joint costs
were $60,000. Additional information is as follows:
If Processed Further
Product
Units
Produced
Sales
Value at
Split-Off
Sales
Value
Additional
Costs
A
6,000
$40,000
$55,000
$4,000
B
4,000
35,000
45,000
6,000
C
2,000
25,000
30,000
8,000
12,000
$100,000
$130,000
$18,000
83.
Atkinson, Inc., manufactures products A, B, and C from a common process. Joint costs
were $60,000. Additional information is as follows:
If Processed Further
Product
Units
Produced
Sales
Value at
Split-Off
Sales
Value
Additional
Costs
A
6,000
$40,000
$55,000
$4,000
B
4,000
35,000
45,000
6,000
C
2,000
25,000
30,000
8,000
12,000
$100,000
$130,000
$18,000
Topic: Joint Cost Allocation Methods
84.
85.
Cariboo Manufacturing Company incurred a joint cost of $600,000 in the production of X
and Y in a joint process. Presently, 1,800 of X and 1,400 of Y are being produced each
month. Management plans to decrease X's production by 300 units in order to increase the
production of Y by 500 units. Additionally, this change will require minor modifications,
which will add $20,000 to the joint cost. This cost is entirely attributable to product Y.
What is the amount of the joint costs allocable to X and Y before changes to existing
production assuming Cariboo allocates their joint costs according to the proportion of Y
and X produced?
Product X
Product Y
A.
$262,500
$337,500
B.
$264,706
$335,294
C.
$273,529
$326,471
D.
$337,500
$262,500
86.
Upton Company produces two main products and a by-product out of a joint process. The
ratio of output quantities to input quantities of direct material used in the joint process
remains consistent from month to month. Upton has employed the physical-volume
method to allocate joint production costs to the two main products. The net realizable
value of the by-product is used to reduce the joint production costs before the joint costs
are allocated to the main products. Data regarding Upton's operations for the current
month are presented in the chart below. During the month, Upton incurred joint production
costs of $2,520,000. The main products are not marketable at the split-off point and, thus,
have to be processed further.
First
Main
Product
Second
Main
Product
By-
product
Monthly output in
pounds
90,000
150,000
60,000
Selling Price per
pound
$30
$14
$2
Separable
process costs
$540,000
$660,000
87.
The Mallak Company produced three joint products at a joint cost of $100,000. Two of
these products were processed further. Production and sales were:
Weight
Sales
Addt’l. Processing
Costs
P
300,000
lbs.
$245,000
$200,000
Q
100,000
lbs.
30,000
-0-
R
100,000
lbs.
175,000
100,000
88.
The Mallak Company produced three joint products at a joint cost of $100,000. Two of
these products were processed further. Production and sales were:
Weight
Sales
Addt’l. Processing
Costs
P
300,000
lbs.
$245,000
$200,000
Q
100,000
lbs.
30,000
-0-
R
100,000
lbs.
175,000
100,000
Assume Q is a by-product and Mallak uses the cost reduction method of accounting for
by-product cost. If estimated net realizable value is used, how much of the joint costs
would be allocated to product R?
89.
The Mallak Company produced three joint products at a joint cost of $100,000. Two of
these products were processed further. Production and sales were:
Weight
Sales
Addt’l. Processing
Costs
P
300,000
lbs.
$245,000
$200,000
Q
100,000
lbs.
30,000
-0-
R
100,000
lbs.
175,000
100,000
90.
The Mallak Company produced three joint products at a joint cost of $100,000. Two of
these products were processed further. Production and sales were:
Weight
Sales
Addt’l. Processing
Costs
P
300,000
lbs.
$245,000
$200,000
Q
100,000
lbs.
30,000
-0-
R
100,000
lbs.
175,000
100,000
91.
Cambridge Company manufactures three main products, L, M, and N, from a joint process.
Additional information for June production activity follows:
L
M
N
Total
Units
produced
50,000
40,000
10,000
100,000
Joint costs
?
?
?
$450,000
Sales
value at
split-off
$420,000
$270,000
$60,000
$750,000
Additional
costs if
process
further
$88,000
$30,000
$12,000
$130,000
Sale value
if
processed
further
$538,000
$320,000
$78,000
$936,000
92.
Which of the following is not a physical measure that can be used for allocating joint costs
using the physical quantities method?
