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43. Garrison Co. produces three products — X, Y, and Z — from a joint process. Each product
may be sold at the split-off point or processed further. Additional processing requires no special
facilities, and production costs of further processing are entirely variable and traceable to the
products involved. Last year all three products were processed beyond split-off. Joint production
costs for the year were $120,000. Sales values and costs needed to evaluate Garrison's
production policy follow.
Units Sales Value at If Processed Further
Product Produced Split Off Sales Value Additional Costs
X 6,000 $40,000 $80,000 $1,200
Y 3,000 15,000 40,000 3,000
Z 1,000 16,000 30,000 1,500
The amount of joint costs allocated to product Z using the sales value at split-off method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all
dollar amounts to the nearest whole dollar):
44. Garrison Co. produces three products — X, Y, and Z — from a joint process. Each product
may be sold at the split-off point or processed further. Additional processing requires no special
facilities, and production costs of further processing are entirely variable and traceable to the
products involved. Last year all three products were processed beyond split-off. Joint production
costs for the year were $120,000. Sales values and costs needed to evaluate Garrison's
production policy follow.
Units Sales Value at If Processed Further
Product Produced Split Off Sales Value Additional Costs
X 6,000 $40,000 $80,000 $1,200
Y 3,000 15,000 40,000 3,000
Z 1,000 16,000 30,000 1,500
The amount of joint costs allocated to product X using the net realizable value method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all
dollar amounts to the nearest whole dollar):
45. Garrison Co. produces three products — X, Y, and Z — from a joint process. Each product
may be sold at the split-off point or processed further. Additional processing requires no special
facilities, and production costs of further processing are entirely variable and traceable to the
products involved. Last year all three products were processed beyond split-off. Joint production
costs for the year were $120,000. Sales values and costs needed to evaluate Garrison's
production policy follow.
Units Sales Value at If Processed Further
Product Produced Split Off Sales Value Additional Costs
X 6,000 $40,000 $80,000 $1,200
Y 3,000 15,000 40,000 3,000
Z 1,000 16,000 30,000 1,500
The amount of joint costs allocated to product Y using the net realizable value method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all
dollar amounts to the nearest whole dollar):
46. Garrison Co. produces three products — X, Y, and Z — from a joint process. Each product
may be sold at the split-off point or processed further. Additional processing requires no special
facilities, and production costs of further processing are entirely variable and traceable to the
products involved. Last year all three products were processed beyond split-off. Joint production
costs for the year were $120,000. Sales values and costs needed to evaluate Garrison's
production policy follow.
Units Sales Value at If Processed Further
Product Produced Split Off Sales Value Additional Costs
X 6,000 $40,000 $80,000 $1,200
Y 3,000 15,000 40,000 3,000
Z 1,000 16,000 30,000 1,500
The amount of joint costs allocated to product Z using the net realizable value method is
(calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all
dollar amounts to the nearest whole dollar):
47. Which of the following statements best describes a by-product?
48. For the purposes of cost accumulation, which of the following are identifiable as different
individual products before the split-off point?
By-products Joint products
A) No No
B) Yes No
C) Yes Yes
D) No Yes
49. Relative sales value at split-off is used to allocate:
Cost Beyond
Split-Off Joint Costs
A) Yes Yes
B) Yes No
C) No No
D) No Yes
50. Which of the following is not one of the objectives of cost allocation?
51. The cost allocation method most widely used because of its accuracy and ability to
provide a detailed level of analysis is:
52. The departmental approach of cost allocation recognizes that the typical manufacturing
operation involves which type(s) of departments?
53. Place the following phases of the departmental approach in the correct order.
1. Allocate the production department costs to products.
2. Allocate service costs to the overhead costs.
3. Allocate the service department costs to the production department.
4. Trace all direct costs and allocate overhead costs to both the service and production
departments.
54. Which of the following is an example of a physical measure used in the physical measure
method?
55. Which is not a common method used to allocate costs under the departmental
approach?
56. A key disincentive effect of departmental cost allocation can occur when:
57. Net Realizable Value (NRV) of a product is:
58. By-product costing approaches include:
59. Johns Company manufactures products R, S, and T from a joint process. The following
information is available:
Product
R S T Total
Units produced 12,000 ? ? 24,000
Sales value at split-off ? ? $50,000 $200,000
Joint costs $48,000 ? ? $120,000
Sales value if processed further $110,000 $90,000 $60,000 $260,000
Additional costs if processed further $18,000 $14,000 $10,000 $42,000
Assuming that joint product costs are allocated using the relative-sales-value at split-off
approach, what was the sales value at split-off for products R and S?
Product R Product S
A) $55,000 $75,000
B) $63,000 $81,000
C) $80,000 $70,000
D) $91,000 $83,000
E) $101,000 $92,000
60. The Long Term Care Plus Company has two service departments — actuarial and
premium rating, and two operations departments — marketing and sales. The distribution of each
service department's efforts to the other departments is shown below:
FROM TO
Actuarial Rating Marketing Sales
Actuarial 0% 40% 20% 40%
Rating 25% 0% 37.5% 37.5%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Actuarial $60,000
Premium Rating $40,000
Marketing $60,000
Sales $70,000
The total cost accumulated in the marketing department using the direct method is (calculate all
ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to
the nearest whole dollar):
61. The Long Term Care Plus Company has two service departments — actuarial and
premium rating, and two operations departments — marketing and sales. The distribution of each
service department's efforts to the other departments is shown below:
FROM TO
Actuarial Rating Marketing Sales
Actuarial 0% 40% 20% 40%
Rating 25% 0% 37.5% 37.5%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Actuarial $60,000
Premium Rating $40,000
Marketing $60,000
Sales $70,000
The total cost accumulated in the sales department using the direct method is (calculate all
ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to
the nearest whole dollar):
62. The Long Term Care Plus Company has two service departments — actuarial and
premium rating, and two operations departments — marketing and sales. The distribution of each
service department's efforts to the other departments is shown below:
FROM TO
Actuarial Rating Marketing Sales
Actuarial 0% 40% 20% 40%
Rating 25% 0% 37.5% 37.5%
The direct operating costs of the departments (including both variable and fixed costs) were as
follows:
Actuarial $60,000
Premium Rating $40,000
Marketing $60,000
Sales $70,000
The total cost accumulated in the marketing department using the step method is (calculate all
ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts
to the nearest whole dollar; assume the actuarial department goes first):
