PAR1 1 SECTION D
JOINT COSTING AND BY PRODUCT
[Link] of the following are correct reasons for allocating joint costs?
A To determine the cost of goods sold of main products
B To determine the cost of goods sold of by-products
C To determine the cost of joint products for contract reimbursements
A A and B only
B A and C only
C A only
D A, B, and C
[Link] Brands Company manufactures candy from a joint production process and has four main
products: Choco Bar, Nougat Bar, Peanut Bar, and Coconut Bar. Joint costs for one batch are as
follows:
Direct materials $30,500
Direct labor 19,500
Overhead 22,000
Total joint costs $72,000
At the split-off point, one joint process batch yields 30,000 Choco Bars, 25,000 Nougat Bars, 20,000
Peanut Bars, and 15,000 Coconut Bars. If all products are sold at the split-off point, prices are $0.75
per Choco Bar, $1.00 per Nougat Bar, $1.25 per Peanut Bar, and $1.50 per Coconut Bar.
Tasty Brands has the option of further processing all products into king-sized bars with the following
added costs and premium prices:
Added Cost King-sized Price
Choco Bar $18,000 $1.25 per bar
Nougat Bar $20,000 $1.75 per bar
Peanut Bar $22,000 $2.50 per bar
Coconut Bar $24,000 $3.25 per bar
What are the joint costs allocated to the Nougat Bars under the sales value at split-off method?
Round intermediate calculations to two decimal points. (Note: This means the allocations across all
four bars won't add up perfectly to the joint cost.)
A $20,170
B $18,000
C $20,000
D $19,000
[Link] BVC Company has a joint process that produces three products at a total cost of $400,000.
Expected sales are $1,000,000 for Product 1, $800,000 for Product 2, and $5,000 for Product 3.
Which of the following is correct concerning how BVC can account for this joint process?
BVC can allocate a total of $400,000 to Product 1 and Product 2 and also report by-product
A
revenue of $5,000.
BVC can allocate a total of $395,000 to Product 1 and Product 2 and report $5,000 of by-product
B
revenue.
BVC can allocate a total of $400,000 to Product 1, Product 2, and Product 3 and report $5,000 of
C
by-product revenue.
BVC can allocate a total of $400,000 to Product 1 and Product 2 and also report by-product
D
revenue of $0.
[Link] YKZ Company processes a single material into three separate products: G, H, and I. During
May, the joint costs of processing were $20,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
G 1,000 $20 $35 $4,000
H 3,000 $15 $27 $24,000
I 6,000 $10 $18 $18,000
YKZ allocates joint costs using the sales-value-at-split-off method. Assuming YKZ separately
processes Product G and sells 800 units of it in May, how much cost of goods sold would YKZ record
for these Product G sales?
A $7,200
B $5,760
C $3,200
D $4,800
[Link] method of accounting for joint product costs that will produce the same gross profit rate for
all products is the:
A Actual costing method.
B Physical units method.
C Constant gross profit method.
D Sales value at split-off method.
[Link] YKZ Company processes a single material into three separate products: G, H, and I. During
May, the joint costs of processing were $20,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
G 1,000 $20 $35 $5,000
H 3,000 $15 $27 $21,000
I 6,000 $10 $18 $18,000
YKZ allocates joint costs using the estimated net realizable value (NRV) method. Assuming YKZ
separately processes Product I and sells 5,600 units of it in May, how much cost of goods sold would
YKZ record for these sales?
A $25,760
B $28,000
C $26,152
D $16,800
[Link] purposes of allocating joint costs to products Y and Z, the net realizable value (NRV) method is
used. An increase occurs in the costs beyond split-off for product Z while costs beyond split-off for
product Y remain constant. If the selling prices of finished products Y and Z remain constant, the
percentage of the total joint costs allocated to Product Y and Product Z will:
A increase for Product Y and Product Z.
B decrease for Product Y and increase for Product Z.
C decrease for Product Y and Product Z.
D increase for Product Y and decrease for Product Z.
8.A processing department produces joint products Ajac and Bjac, each of which incurs separable
production costs after split-off. Information concerning a batch of these products produced with a
$60,000 joint cost follows:
Product Separable Costs Final Sales Value
Ajac $8,000 $80,000
Bjac 22,000 40,000
Total $30,000 $120,000
What amount of the joint cost would be allocated to Ajac if joint costs are allocated to products
using the net realizable value method?
A $56,000
B $12,000
C $48,000
D $40,000
[Link] MIR Company processes a single material into three separate products: A, B, and C. During
July, the joint costs of processing were $1,677,560. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
A 17,000 $10 $20 $119,000
B 34,000 $15 $28 $340,000
C 51,000 $20 $24 $153,000
If MIR allocates joint costs using the constant gross margin method, how much would be allocated to
Products A, B, and C, respectively?
A $190,400, $526,320, and $960,840
B $145,520, $536,520, and $995,520
C $167,756, $503,268, and $1,006,536
D $194,717, $539,216, and $943,628
[Link] UFZ Company processes a single material into three separate products: L, M, and N. During
October, the joint costs of processing were $215,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
L 1,000 $45 $55 $6,000
M 3,000 $45 $60 $30,000
N 6,000 $30 $35 $16,000
If UFZ allocates joint costs using the estimated net realizable value (NRV) method, how much would
be allocated to Products L, M, and N, respectively?
A $26,573, $86,966, and $101,461
B $27,000, $78,000, and $110,000
C $26,875, $80,625, and $107,500
D $26,807, $82,061, and $106,132
[Link] Brands Company manufactures candy from a joint production process and has four main
products: Choco Bar, Nougat Bar, Peanut Bar, and Coconut Bar. Joint costs for one batch are as
follows:
Direct materials $30,500
Direct labor 19,500
Overhead 22,000
Total joint costs $72,000
At the split-off point, one joint process batch yields 30,000 Choco Bars, 25,000 Nougat Bars, 20,000
Peanut Bars, and 15,000 Coconut Bars. If all products are sold at the split-off point, prices are $0.75
per Choco Bar, $1.00 per Nougat Bar, $1.25 per Peanut Bar, and $1.50 per Coconut Bar.
Tasty Brands has the option of further processing all products into king-sized bars with the following
added costs and premium prices:
Added Cost King-sized Price
Choco Bar $18,000 $1.25 per bar
Nougat Bar $20,000 $1.75 per bar
Peanut Bar $22,000 $2.50 per bar
Coconut Bar $24,000 $3.25 per bar
What are the joint costs allocated to the Peanut Bars under the NRV method? Round intermediate
calculations to two decimal points. (Note: This means the allocations across all four bars won't add
up perfectly to the joint cost.)
A $18,340
B $19,000
C $20,160
D $16,000
[Link] UFZ Company processes a single material into three separate products: L, M, and N. During
October, the joint costs of processing were $215,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
L 1,000 $45 $55 $6,000
M 3,000 $45 $60 $30,000
N 6,000 $30 $35 $16,000
If UFZ allocates joint costs using the physical measure method, how much would be allocated to
Products L, M, and N, respectively?
A $26,875, $80,625, and $107,500
B $21,500, $64,500, and $129,000
C $71,667, $71,667, and $71,667
D $80,625, $80,625, and $53,750
[Link] of the following statements is correct concerning separable costs?
A Separable costs are used in the sales-value-at-split-off method.
B Separable costs need to be allocated to joint products in order to calculate cost of goods sold.
C Separable costs are incurred prior to the split-off point.
Separable costs are relevant to whether a product should be sold at the split-off point or
D
processed further.
[Link] UFZ Company processes a single material into three separate products: L, M, and N. During
October, the joint costs of processing were $215,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
L 1,000 $45 $55 $6,000
M 3,000 $45 $60 $30,000
N 6,000 $30 $35 $16,000
If UFZ allocates joint costs using the constant gross margin method, how much would be allocated to
Products L, M, and N, respectively?
A $27,000, $78,000, and $110,000
B $21,500, $64,500, and $129,000
C $26,875, $80,625, and $107,500
D $26,807, $82,061, and $106,132
[Link] of the following statements is correct concerning the split-off point?
A The split-off point is when joint products become separately identifiable.
B Costs incurred after the split-off point are called joint costs.
C Costs incurred prior to the split-off point are called separable costs.
D The split-off point is the beginning of a joint process.
[Link] MIR Company processes a single material into three separate products: A, B, and C. During
July, the joint costs of processing were $1,677,560. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
A 17,000 $10 $20 $119,000
B 34,000 $15 $28 $340,000
C 51,000 $20 $24 $153,000
If MIR allocates joint costs using the physical measure method, how much would be allocated to
Products A, B, and C, respectively?
A $167,756, $503,268, and $1,006,536
B $279,599, $559,181, and $838,780
C $559,187, $559,187, and $559,187
D $372,791, $559,187, and $745,582
[Link] Co. manufactures a major product that gives rise to a by-product called May. May's only
separable cost is a $1 selling cost when a unit is sold for $4. Kode accounts for May's sales by
deducting the $3 net amount from the cost of goods sold of the major product. There are no
inventories. If Kode were to change its method of accounting for May from a by-product to a joint
product, what would be the effect on Kode's overall gross margin?
A Gross margin increases by $3 for each unit of May sold.
B Gross margin increases by $1 for each unit of May sold.
C Gross margin increases by $4 for each unit of May sold.
D No effect.
[Link] Corp. manufactures products W, X, Y, and Z from a joint process. Additional information is
as follows:
Sales If Processed Further
Product Units Produced Value at Split-Off Additional Costs Sales Value
W 6,000 $80,000 $7,500 $90,000
X 5,000 60,000 6,000 70,000
Y 4,000 40,000 4,000 50,000
Z 3,000 20,000 2,500 30,000
Total 18,000 $200,000 $20,000 $240,000
Assuming that total joint costs of $160,000 are allocated using the sales value at split-off approach,
what are the joint costs allocated to each product?
A W: $64,000; X: $48,000; Y: $32,000; Z: $16,000
B W: $53,333; X: $44,444; Y: $35,556; Z: $26,667
C W: $80,000; X: $60,000; Y: $40,000; Z: $20,000
D W: $40,000; X: $40,000; Y: $40,000; Z: $40,000
[Link] Brands Company manufactures candy from a joint production process and has four main
products: Choco Bar, Nougat Bar, Peanut Bar, and Coconut Bar. Joint costs for one batch are as
follows:
Direct materials $30,500
Direct labor 19,500
Overhead 22,000
Total joint costs $72,000
At the split-off point, one joint process batch yields 30,000 Choco Bars, 25,000 Nougat Bars, 20,000
Peanut Bars, and 15,000 Coconut Bars. If all products are sold at the split-off point, prices are $0.75
per Choco Bar, $1.00 per Nougat Bar, $1.25 per Peanut Bar, and $1.50 per Coconut Bar.
Tasty Brands has the option of further processing all products into king-sized bars with the following
added costs and premium prices:
Added Cost King-sized Price
Choco Bar $18,000 $1.25 per bar
Nougat Bar $20,000 $1.75 per bar
Peanut Bar $22,000 $2.50 per bar
Coconut Bar $24,000 $3.25 per bar
What are the joint costs allocated to the Coconut Bars under the constant gross profit method?
Round intermediate calculations to two decimal points. (Note: This means the allocations across all
four bars won't add up perfectly to the joint cost.)
A $15,331.50
B $17,100.00
C $12,000.00
D $17,820.00
[Link] of the following are correct reasons for allocating joint costs?
To determine whether products produced in the joint process should be sold at the split-off point
A
or processed further
B To determine whether a company should perform a joint process
C To determine the cost of main products for rate regulation purposes
A A and C only
B B and C only
C C only
D A and B only
[Link] UFZ Company processes a single material into three separate products: L, M, and N. During
October, the joint costs of processing were $215,000. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
L 1,000 $45 $55 $6,000
M 3,000 $45 $60 $30,000
N 6,000 $30 $35 $16,000
If UFZ allocates joint costs using the sales-value-at-split-off method, how much would be allocated to
Products L, M, and N, respectively?
A $26,573, $86,966, and $101,461
B $26,807, $82,061, and $106,132
C $26,875, $80,625, and $107,500
D $21,500, $64,500, and $129,000
[Link] MIR Company processes a single material into three separate products: A, B, and C. During
July, the joint costs of processing were $1,677,560. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
A 17,000 $10 $20 $119,000
B 34,000 $15 $28 $340,000
C 51,000 $20 $24 $153,000
If MIR allocates joint costs using the sales-value-at-split-off method, how much would be allocated
to Products A, B, and C, respectively?
A $226,697, $634,753, and $816,110
B $194,717, $539,216, and $943,628
C $167,756, $503,268, and $1,006,536
D $279,593, $559,187, and $838,780
[Link] MIR Company processes a single material into three separate products: A, B, and C. During
July, the joint costs of processing were $1,677,560. Production and sales value information for the
month were as follows:
Units Sales Value per Unit at Split- Final Sales Value per Separable
Product
Produced Off Unit Costs
A 17,000 $10 $20 $119,000
B 34,000 $15 $28 $340,000
C 51,000 $20 $24 $153,000
If MIR allocates joint costs using the net realizable value (NRV) method, how much would be
allocated to Products A, B, and C, respectively?
A $226,697, $634,753, and $816,110
B $190,400, $526,320, and $960,840
C $167,756, $503,268, and $1,006,536
D $194,714, $539,218, and $943,628
[Link] of the following statements best describes a by-product?
A product that usually produces a small amount of revenue when compared to the main product
A
revenue
B The second product line that follows the first product line.
C Simultaneously produced products of more than nominal value
A product produced with the main product whose sales value does not cover its cost of
D
production
[Link] Brands Company manufactures candy from a joint production process and has four main
products: Choco Bar, Nougat Bar, Peanut Bar, and Coconut Bar. Joint costs for one batch are as
follows:
Direct materials $30,500
Direct labor 19,500
Overhead 22,000
Total joint costs $72,000
At the split-off point, one joint process batch yields 30,000 Choco Bars, 25,000 Nougat Bars, 20,000
Peanut Bars, and 15,000 Coconut Bars. If all products are sold at the split-off point, prices are $0.75
per Choco Bar, $1.00 per Nougat Bar, $1.25 per Peanut Bar, and $1.50 per Coconut Bar.
Tasty Brands has the option of further processing all products into king-sized bars with the following
added costs and premium prices:
Added Cost King-sized Price
Choco Bar $18,000 $1.25 per bar
Nougat Bar $20,000 $1.75 per bar
Peanut Bar $22,000 $2.50 per bar
Coconut Bar $24,000 $3.25 per bar
What are the joint costs allocated to the Choco Bars under the physical units method? Round
intermediate calculations to two decimal points.
A $16,200
B $24,000
C $17,100
D $18,153
