Question 1

The total cost accumulated in the assembly 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) :

Accepted Answer

A)  $104,500.
B)  $109,950.
C)  $124,050.
D)  $130,750.
E)  $136,500.F) A) and C)
G) A) and B)

Question 2

The total cost accumulated in the fabrication department using the direct 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) :

Accepted Answer

A)  $102,750.
B)  $114,600.
C)  $87,000.
D)  $131,250.
E)  $135,000.F) B) and E)
G) C) and E)

Question 3

The cost allocation method most widely used because of its accuracy and ability to provide a detailed level of analysis is:

Accepted Answer

A)  Departmental approach.
B)  Activity-based approach.
C)  Direct approach.
D)  Accounting approach.
E)  Joint product costing.F) D) and E)
G) C) and D)

Question 4

Firm X has a production process that has a total joint cost of $15,000. At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1 using the physical measure method?

Accepted Answer

A)  $2.50.
B)  $3.00.
C)  $3.50.
D)  $4.00.E) All of the above
F) B) and C)

Question 5

The concepts of cost allocation that are used in manufacturing can also apply in:

Accepted Answer

A)  Service and not-for-profit industries.
B)  Service industries.
C)  Not-for-profit industries.
D)  Limited instances outside of manufacturing.
E)  The concepts apply only in manufacturing.F) A) and B)
G) A) and C)

Question 6

Which one of the following methods uses units of output to allocate joint costs to joint products?

Accepted Answer

A)  Net realizable value method.
B)  Physical units method.
C)  Net sales value method.
D)  Sales value at split-off method.
E)  Activity-based costing.F) B) and E)
G) C) and D)

Question 7

The departmental cost allocation approach is preferred when the firm has:

Accepted Answer

A)  Homogeneous processes.
B)  Heterogeneous processes.
C)  Diverse products.
D)  Many production activities.E) All of the above
F) A) and B)

Question 8

The direct method of departmental cost allocation is the simplest of the three methods because it:

Accepted Answer

A)  Ignores the reciprocal flows.
B)  Uses the service flows only to service departments.
C)  Uses a sequence of steps to allocate service department costs.
D)  All of the above.E) B) and C)
F) A) and D)

Question 9

Lond Company produces joint products Jana and Reta, and by-product Bynd. Jana is sold at split-off; Reta and Bynd undergo additional processing. Production data pertaining to these products for the year ended December 31, 2013 were as follows:  Lond had no beginning or ending inventories and no materials were spoiled in production. Bynd's net realizable value is deducted from joint costs. Joint costs are allocated to joint products to achieve the same gross margin percentage for each joint product.
Required:
Prepare the following information for Lond Company for the year ended December 31, 2013:
1. Total gross margin.
2. Allocation of joint costs to Jana and Reta.
3. Separate gross margins for Jana and Reta.

Accepted Answer

Answer may...

Question 10

A key ethical issue in cost allocation involves costing in an international context, because the choice of a cost allocation method can affect:

Accepted Answer

A)  Management reward systems.
B)  Management fraud.
C)  Taxes in domestic and foreign countries.
D)  The firm's financial statements.
E)  The fair share of cost by a governmental unit.F) C) and D)
G) C) and E)

Question 11

The Chapman Manufacturing Company has two service departments - manufacturing support and facilities management, and two production departments - assembly and packing/shipping. The distribution of each service department's efforts to the other departments is shown below:  The direct operating costs of the departments (including both variable and fixed costs) were as follows:  Required:
(calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):
(1) Allocate the service department costs to the production departments using the direct method.
(2) Allocate the service department costs to the production departments using the step method with the support department going first.
(3) Allocate the service department costs to the production departments using the reciprocal method.

Accepted Answer

Answer may...

Question 12

The amount of joint costs allocated to product Z using the physical measure 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) :

Accepted Answer

A)  $8,000.
B)  $32,000.
C)  $43,222.
D)  $14,000.
E)  $6,666.F) A) and B)
G) A) and E)

Question 13

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) :

Accepted Answer

A)  $19,222.
B)  $35,000.
C)  $18,450.
D)  $28,496.
E)  $17,778.F) A) and E)
G) C) and D)

Question 14

The amount of joint costs allocated to product X 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) :

Accepted Answer

A)  $20.000.
B)  $32,444.
C)  $40,000.
D)  $17,677.
E)  $15,000.F) B) and C)
G) None of the above

Question 15

The amount of joint costs allocated to product M using the physical measure 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) :

Accepted Answer

A)  $23,438.
B)  $33,434.
C)  $40,313.
D)  $27,109.
E)  $11,250.F) B) and E)
G) C) and E)

Question 16

The objectives of cost allocation are to:

Accepted Answer

A)  Motivate, provide incentives, and determine fair rewards.
B)  Accurately define, divide and spread direct costs.
C)  Value, measure, and interpret cost data.
D)  Connect, communicate, and discern information.
E)  Define, refine, and re-define indirect costs.F) A) and E)
G) A) and C)

Question 17

The most effective basis for cost allocation exists when which one of the following can be determined?

Accepted Answer

A)  Cost shifting.
B)  Benefit received.
C)  Equity share.
D)  Cause and effect relationship.
E)  Ability to bear.F) A) and E)
G) All of the above

Question 18

The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

Accepted Answer

A)  $104,500.
B)  $109,950.
C)  $124,050.
D)  $130,750.
E)  $136,500.F) A) and E)
G) C) and E)

Question 19

Net Realizable Value (NRV)  of a product is:

Accepted Answer

A)  Split-off cost - profit margin - additional processing and selling cost.
B)  Profit at split-off + additional processing and selling cost.
C)  Ultimate sales value - additional processing and selling cost.
D)  Ultimate sales value + additional processing and selling cost.
E)  Cost allocation plus separable cost.F) A) and B)
G) C) and D)

Question 20

Which of the following is not an ethical issue managers encounter with cost allocation?

Accepted Answer

A)  Products that are produced for both a competitive market and a public agency.
B)  Governmental agency provides a free service to the public.
C)  Governmental agency reimburses the costs of a private institution.
D)  Costs of products sold to or from foreign subsidiaries.E) All of the above
F) None of the above

Exam 7: Cost Allocation: Departments, Joint Products, and By-Products

The amount of joint costs allocated to product M using the physical measure 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) :

Correct Answer
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A key ethical issue in cost allocation involves costing in an international context, because the choice of a cost allocation method can affect:

Correct Answer
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The total cost accumulated in the fabrication department using the direct 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) :

Correct Answer
verified

The objectives of cost allocation are to:

Correct Answer
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The departmental cost allocation approach is preferred when the firm has:

Correct Answer
verified

The concepts of cost allocation that are used in manufacturing can also apply in:

Correct Answer
verified

The cost allocation method most widely used because of its accuracy and ability to provide a detailed level of analysis is:

Correct Answer
verified

Correct Answer
verified
Answer may...
View Answer

The direct method of departmental cost allocation is the simplest of the three methods because it:

Correct Answer
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Correct Answer
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Answer may...
View Answer

The amount of joint costs allocated to product X 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) :

Correct Answer
verified

The most effective basis for cost allocation exists when which one of the following can be determined?

Correct Answer
verified

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) :

Correct Answer
verified

The amount of joint costs allocated to product Z using the physical measure 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) :

Correct Answer
verified

Firm X has a production process that has a total joint cost of $15,000. At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1 using the physical measure method?

Correct Answer
verified

Net Realizable Value (NRV) of a product is:

Correct Answer
verified

The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

Correct Answer
verified

Which one of the following methods uses units of output to allocate joint costs to joint products?

Correct Answer
verified

Which of the following is not an ethical issue managers encounter with cost allocation?

Correct Answer
verified

The total cost accumulated in the assembly 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) :

Correct Answer
verified

Exam 7: Cost Allocation: Departments, Joint Products, and By-Products

The amount of joint costs allocated to product M using the physical measure 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) :

Correct AnswerverifiedShow Answer

A key ethical issue in cost allocation involves costing in an international context, because the choice of a cost allocation method can affect:

Correct AnswerverifiedShow Answer

The total cost accumulated in the fabrication department using the direct 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) :

Correct AnswerverifiedShow Answer

The objectives of cost allocation are to:

Correct AnswerverifiedShow Answer

The departmental cost allocation approach is preferred when the firm has:

Correct AnswerverifiedShow Answer

The concepts of cost allocation that are used in manufacturing can also apply in:

Correct AnswerverifiedShow Answer

The cost allocation method most widely used because of its accuracy and ability to provide a detailed level of analysis is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAnswer may...View AnswerShow Answer

The direct method of departmental cost allocation is the simplest of the three methods because it:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAnswer may...View AnswerShow Answer

The amount of joint costs allocated to product X 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) :

Correct AnswerverifiedShow Answer

The most effective basis for cost allocation exists when which one of the following can be determined?

Correct AnswerverifiedShow Answer

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) :

Correct AnswerverifiedShow Answer

The amount of joint costs allocated to product Z using the physical measure 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) :

Correct AnswerverifiedShow Answer

Firm X has a production process that has a total joint cost of $15,000. At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1 using the physical measure method?

Correct AnswerverifiedShow Answer

Net Realizable Value (NRV) of a product is:

Correct AnswerverifiedShow Answer

The total cost accumulated in the fabrication department using the step method is (assume the purchasing department goes first; calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) :

Correct AnswerverifiedShow Answer

Which one of the following methods uses units of output to allocate joint costs to joint products?

Correct AnswerverifiedShow Answer

Which of the following is not an ethical issue managers encounter with cost allocation?

Correct AnswerverifiedShow Answer

The total cost accumulated in the assembly 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) :

Correct AnswerverifiedShow Answer

Correct Answer
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Answer may...
View Answer

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Answer may...
View Answer

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