7.All products yielded from joint product processing have some positive value to thefirm.Difficulty:1Objective:2Terms to Learn:byproducts, joint products Get answer to your question and much more Not all products yielded from joint product processing have some positive value tothe firm.8.Litigation may be a reason that joint costs are allocated to individual products.Difficulty:1Objective:3 Get answer to your question and much more Terms to Learn:joint costs9.The sales value at splitoff method is an example of allocating costs based upon thebenefits-received criterion.Difficulty:2Objective:4Terms to Learn:sales value at splitoff method Get answer to your question and much more 10.A major deficiency of the sales value at splitoff method is that this method does notallow management to obtain individual product costs and gross-margin information.Difficulty:2Objective:4Terms to Learn:sales value at splitoff method Get answer to your question and much more The sales value at splitoff method enables the accountant to obtain individualproduct costs and gross margins.11.An advantage of the physical-measure method is that obtaining physical measuresfor all products is an easy task.Difficulty:2Objective:4 Get answer to your question and much more Terms to Learn:physical-measure methodFor some products such as gas, obtaining physical measures is difficult. Joint costs are incurred beyond the split-off point and are assignable to individual products False - joint costs are incurred prior to the split-off Separable costs are assignable after the split-off point The focus of joint costing is assigning costs to individual products as assembly occurs. False - The focus is accumulating costs incurred on the joint products. A byproduct has a minimal sales value. The sales value at split-off method is an example of allocating costs based upon the benefits-received criterion. A major deficiency of the sales value at split-off method is that this method does not allow management to obtain individual product costs and rorss-margin information. False - The sales value at split-off method enables the accountant to obtain individual product costs and gross margins. An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task. False - For some products such as gas, obtaining physical measures is difficult. The general guideline for using the physical-measure method is to include only joint products or main products in the physical-measure weighting computations. The estimated net realizable value method is used when the market selling prices at the split-off point are not available. Net realizable value generally means expected sales value plus expected separable costs. False - Net realizable value is expected sales value minus expected separable costs. The net realizable value method is generally used for products for services that are processed and after split-off additional value is added to the product and a selling price can be determined. The estimated net realizable value method allocates joint costs on the basis of the expected final sales value in the ordinary course of business less the expected separable costs of production and marketing. The constant gross-margin % method differs from market-based joint-cost allocation method (sales value at split-off and estimated net realizable value) since no account is taken of profits earned before or after the split-off point when allocating joint costs. False - The constant gross-margin % method takes account of the profits earned before or after the splitoff when allocating joint costs. The sales value at split-off method presupposes the exact number of subsequent steps undertaken for further processing. False - The sales value at split-off method does not presuppose the exact number of subsequent steps A criticism of the practice of carrying inventories at estimated net realizable values is that this practice recognized income before sales are made. Physical measures such as weight or volume are the best indicator of the benefits received for allocating joint costs. False - Revenues are a better indicator of the benefits received than are physical measures. Joint costs that do not differ between alternatives are particularly relevant for decision making. False - Only costs that differ are relevant to a manager's decision. Byproducts are recognized in the general ledger either at the time of production or at the time of sale. Recognition of byproducts in the financial statements at the time of sale usually occurs when the dollar amounts of the byproducts are immaterial. A sound reason for reporting revenue from byproducts as an income statement item at the time of sale is to lessen the chance of managers managing reported earnings. False - This method makes it easier for managers to time earnings since they can time the sale of products and give earnings a boost. What type of cost is the result of an event that results in more than one product or service simultaneously? All costs incurred beyond the split-off point that are assignable to one or more individual products are called In joint costing When a single mfg process yields two products, one of which has a relatively high sales value compared to the other, the two products are respectively known as main products and by products By products and main products are differentiated by the amount of sales value per unit All of the following changes may indicate a change in product classification of a mfg process which has a split-off point EXCEPT a main product becomes a joint product Which of the following methods of allocating costs use market-based data? all of the above use market-based methods Products with a
relatively low sales value are known as Which of the following stmts is true regarding main products and byproducts? product classifications may change over time Outputs with zero sales value are accounted for by Which of the following is a reason to allocate joint costs? all of the above are reasons to allocate joint costs Proper costs allocation for inventory costing and COGS
computations are important because Which of the following is NOT a primary reason for allocating joint costs? to calculate the bonus of the chief executive officer All of the following methods may be used to allocate joint costs EXCEPT the present value allocation method An example of a market-based approach to allocating joint costs is (are) allocating joint costs based on Which of the following stmts is true in regard to the cause-and-effect relationship between allocated joint costs and individual products? there is no cause-and-effect relationship The benefits-received criteria for allocating joint costs indicates market-based measures are preferred because revenues are usually the best indicator of the benefits received Which of the following is a disadvantage of the physical-measure method of allocating joint costs? all of the above are disadvantages Which of the methods are allocating joint costs usually is considered the simplest to implement? Industries that recognize income on each product when production is completed include Why do accountants criticize the practice of carrying inventories at estimated net realizable values? the effect of this practice is to recognize income before sales are made When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the extra operating income earned past the splitoff point Which method of acct recognizes by products in the financial stmts at teh time their production is completed? A negative consequence of recording byproducts in the acct records when the sale
occurs is |