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Cost Accounting - Chapter 11

This document contains a chapter on joint products/by-products from a textbook. It includes 10 true/false questions and their answers, and 9 multiple choice problems involving allocating joint costs between main and by-products. The problems provide production details and sales values for different companies and ask students to determine the allocation of joint costs using various methods like physical units, net realizable value, and weighted average. The document aims to teach students how to allocate joint costs across multiple products.

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8K views5 pages

Cost Accounting - Chapter 11

This document contains a chapter on joint products/by-products from a textbook. It includes 10 true/false questions and their answers, and 9 multiple choice problems involving allocating joint costs between main and by-products. The problems provide production details and sales values for different companies and ask students to determine the allocation of joint costs using various methods like physical units, net realizable value, and weighted average. The document aims to teach students how to allocate joint costs across multiple products.

Uploaded by

xxxxxxxxx
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Problem 3 - Anchor Company: Includes methods and financial breakdown for Anchor Company's joint products.
  • Problem 1 - Oven Company: Presents various methods and calculations for joint cost allocation for the Oven Company.
  • Problem 4 - Laguna Chemical Company: Illustrates revenue calculations for joint products for Laguna Chemical using different methods.
  • Problem 7 - North Avenue Products Company: Explains sales and joint venture share calculations for North Avenue products.
  • Problem 5 - Fiber Company: Discusses sales and cost details for Fiber Company's by-products A and B.
  • Problem 6 - Evening Company: Details percentages and share allocation of joint costs for Evening Company products.
  • Problem 9 - Magnolia Company: Focuses on sales value and percentage split for Magnolia Company joint costs.
  • Multiple Choice - Theory & Problems: Contains theory and problem-based multiple choice questions related to the chapter.

CHAPTER 11 JOINT PRODUCTS/BY-PRODUCTS

TRUE/FALSE
1. T
2. F
3. F
4. T
5. T

6. T
7. T
8. F
9. T
10.T

Problem 1 Owen Company


1. Market Value method
Product
Units Produced
A
20,000
B
32,000
C
36,000
D
24,000

MVat SO
4.00
1.75
3.00
2.75

2. Average Unit Cost Method


Product
Units Produced
A
20,000
B
32,000
C
36,000
D
24,000

11. T
12, F
13. T
14. T
15. F

Total MV Percentage
80,000
70%
56,000
108,000
66,000
310,000

Average Unit Cost


1.9375

[Link] average method


Product
Units Produced WF
A
20,000
3.0
B
32,000
5.5
C
36,000
5.0
D
24,000
6.0

b. Physical units method


Product
Units Produced
A
13,200
B
8,800
C
4,400

Page 2
Problem 3 Anchor Company

Share in JC
38,750
62,000
69,750
46,500
217,000

Total WF Cost/WF
60,000
.3875
176,000
180,000
144,000

Problem 2 - Meadows Company


a. Sales value at split-off method
Product
SV at SO
Percentage
A
88,000
60%
B
77,000
C
55,000

Average UC
5.00

Share in JC
56,000
39,200
75,600
46,200
217,000

Share in JC
23,250
68,200
69,750
55,800
217,000

Share in JC
52,800
46,200
33,000
132,000
Share in JC
66,000
44,000
22,000
132,000

1. Market value method


Product SV at SO Percentage
A
420,000
60%
B
270,000
C
60,000

Share in JC
252,000
162,000
36,000
450,000

2. Average unit cost method


Product Units Produced Ave UC Share in JC
A
50,000
4.50
225,000
B
40,000
180,000
C
10,000
45,000
450,000

Addl Cost
88,000
30,000
12,000
130,000
Addl Cost
88,000
30,000
12,000
130,000

Problem 4 Laguna Chemical Company


1)
a) - Revenue from by-product shown as additional sales
Sales
Main product
180,000
By-product
1,000
Less: Cost of goods sold
Materials
30,000
Labor
17,400
Overhead
17,400
Cost of goods manufactured
64,800
Less: Inventory, end
6,480
Gross profit
Less: Selling and administrative expenses
Net Income
b)

Page 3
c)

Total Cost
340,000
192,000
48,000
580,000
Total Cost
313.000
210,000
57,000
580,000

181,000

58,320
122,680
54,000
68,680

Revenue from by-product shown as deduction from cost of goods sold of MP


Sales
Main product
180,000
Less: Cost of goods sold
Materials
30,000
Labor
17,400
Overhead
17,400
Cost of goods manufactured
64,800
Less: Inventory, end
6,480
Cost of goods sold
58,320
Less: Revenue from by-product
1,000
57,320
Gross profit
122,680
Less: Selling and administrative expenses
54,000
Net Income
68,680

Revenue from by-product shown as other income

Sales
Main product
Less: Cost of goods sold
Materials
Labor
Overhead
Cost of goods manufactured
Less: Inventory, end
Cost of goods sold
Gross profit
Less: Selling and administrative expenses
Net operating icome
Other income Revenue from by-product
Net Income

180,000
30,000
17,400
17,400
64,800
6,480
58,320
121,680
54,000
67,680
1,000
68,680

2. Revenue from by-product shown as deduction from production cost of main product
Sales
Main product
Less: Cost of goods sold
Materials
Labor
Overhead
Total mfg. cost/cofg manufactured
Less: Rev. from by-product
Net manufacturing cost
Less: Inventory, end
Cost of goods sold
Gross profit
Less: Selling and administrative expenses
Net income
Problem 5 Fisher Company
1,
By-product A
Sales value
P 6,000
Mfg. cost after separation ( 1,100)
Marketing & adm. Exp.
( 750)
Desired profit
( 900)
Share in the joint cost
3,250

Main Product

30,000
17,400
17,400
64,800
1,000
63,800
6,380
57,420
122,580
54,000
68,580

By-product B
P 3,500
( 900)
( 500)
( 420)
1,680

Total manufacturing cost before separation or joint cost


Share of by-product A
Share of by-product B
Share of main product in the mfg. cost before separation

Page 4
2.

180,000

37,500
( 3,250)
( 1,680)
32,570

By-product A

Byproduct B

Sales
75,000
Less: Cost of goods sold
Share in joint cost
32,750
Cost after separation 11,500 44,250
Gross profit
30,750
Less: Marketing & Adm. Exp. 6,000
Net Income
24,750
Problem 6 - Eternity Company
1.
Sales value Z
Further processing cost
Marketing & adm. Exp.
Desired profit
Share of Z in the joint cost

2.

Product Units
X
8,000
Y
10,000

6,000
3,250
1,100

3,500
1,680
900

4,350
1,650
750
900

12,000
( 4.000)
( 2,000)
( 2,000)
4,000

Hypothetical MV
Per Unit
Total HMV
20-5
120,000
25-7
180,000
300,000

Problem 7 North Avenue Products Company


1.
Sales
Less: Cost of goods sold
Share in Joint cost
6,480
Cost after split-off
3,000
Total mfg. cost
9,480
Less: Inventory end
1,580
Gross profit
Less: Selling & Adm. Exp.
Net income

East
17,500

7,900
9,600
3,500
6,1 00

Percentage
40%
60%

Share in JC
80,000
120,000
200,000

West
8,500

Total
26,000

3,600
10,080
3,000
3,600
13,080
540 3,060 2,120 10,960
5,440
15.040
1,700
5,200
3,740
9,840

2. Schedule allocating the joint cost to East and West


Hypothetical MV
Products
Units Produced
Per Unit
Total
Percentage
East
3,000
7.00 1,00 18,000
36%
West
2,000
5.00
10,000
28,000
Total joint cost
Less: Net revenue of by-product
Sales value
Less: Selling & adm. Exp
Net joint cost to be allocated

Page 5
Problem 8

2,580
920
500
420

10,260.00
200
( 20)

180.00
10,080.00

Share in JC
6,480
3,600
10,080

Products
X
Y
Z

Sales value at SO
138,900
69,100
42,000
250,000

Percentage
55.56%
27.64%
16.80%
100.00%

Share in JC
100,000
49,760
_30,240
180,000

42000/250,000 = 16.80% x 180,000


100,000/180,000 = 55.56% x 250,000 = 138,900
100% - 55.56% - 16.80%
= 27.64%
Problem 9 - Magnolia Company
1) Joint cost allocated, if C is treated as a main product.
Products Sales Value at FP
Addl cost
HMV
A
250,000
25,000
225,000
B
175,000
20,000
155,000
C
12,200
12,200
392.200
Multiple choice Theory
1.
C
2.
D
3.
A
4.
D
5.
B

6.
7.
8.
9.
10.

Multiple choice Problems


1.
B.
2.
D
3.
C
4.
D
5.
DECREASE 90,000
6.
B
7.
C
8.
A
9.
C.
10.
B.

D
B
C
A
C

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

Percentage

11.
12.
13.
14.
15.

A
B
C
B
C
D
D
D
A
B

Share in JC

C
C
A
A
B

21.
22.
23.
24.
25.
26.
27.

D
A
C
C
C
D
C

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