Chapter 3 Organizational Cost Flows
CHAPTER 9
COST ALLOCATION FOR JOINT PRODUCTS AND BY-PRODUCTS
MULTIPLE CHOICE
1. If a company obtains two salable products from the refining of one ore, the refining
process should be accounted for as a(n)
a. mixed cost process.
b. joint process.
c. extractive process.
d. reduction process.
ANSWER: b EASY
2. Joint costs are allocated to joint products to
a. obtain a cost per unit for financial statement purposes.
b. provide accurate management information on production costs of each type of
product.
c. compute variances from expected costs for each joint product.
d. allow the use of high-low analysis by the company.
ANSWER: a EASY
3. Joint costs are allocated to which of the following products?
By-products Scrap
,Chapter 3 Organizational Cost Flows
a. yes yes
b. yes no
c. no no
d. no yes
ANSWER: c EASY
4. Joint cost allocation is useful for
a. decision making.
b. product costing.
c. control.
d. evaluating managers’ performance.
ANSWER: b EASY
,Chapter 3 Organizational Cost Flows
5. Joint costs are useful for
a. setting the selling price of a product.
b. determining whether to continue producing an item.
c. evaluating management by means of a responsibility reporting system.
d. determining inventory cost for accounting purposes.
ANSWER: d EASY
6. Which of the following components of production are allocable as joint costs when a
single manufacturing process produces several salable products?
a. direct material, direct labor, and overhead
b. direct material and direct labor only
c. direct labor and overhead only
d. overhead and direct material only
ANSWER: a EASY
7. Each of the following is a method to allocate joint costs except
a. relative sales value.
b. relative net realizable value.
c. relative weight, volume, or linear measure.
d. average unit cost.
ANSWER: d EASY
, Chapter 3 Organizational Cost Flows
8. Joint costs are most frequently allocated based upon relative
a. profitability.
b. conversion costs.
c. prime costs.
d. sales value.
ANSWER: d EASY
9. When allocating joint process cost based on tons of output, all products will
a. be salable at split-off.
b. have the same joint cost per ton.
c. have a sales value greater than their costs.
d. have no disposal costs at the split-off point.
ANSWER: b EASY
CHAPTER 9
COST ALLOCATION FOR JOINT PRODUCTS AND BY-PRODUCTS
MULTIPLE CHOICE
1. If a company obtains two salable products from the refining of one ore, the refining
process should be accounted for as a(n)
a. mixed cost process.
b. joint process.
c. extractive process.
d. reduction process.
ANSWER: b EASY
2. Joint costs are allocated to joint products to
a. obtain a cost per unit for financial statement purposes.
b. provide accurate management information on production costs of each type of
product.
c. compute variances from expected costs for each joint product.
d. allow the use of high-low analysis by the company.
ANSWER: a EASY
3. Joint costs are allocated to which of the following products?
By-products Scrap
,Chapter 3 Organizational Cost Flows
a. yes yes
b. yes no
c. no no
d. no yes
ANSWER: c EASY
4. Joint cost allocation is useful for
a. decision making.
b. product costing.
c. control.
d. evaluating managers’ performance.
ANSWER: b EASY
,Chapter 3 Organizational Cost Flows
5. Joint costs are useful for
a. setting the selling price of a product.
b. determining whether to continue producing an item.
c. evaluating management by means of a responsibility reporting system.
d. determining inventory cost for accounting purposes.
ANSWER: d EASY
6. Which of the following components of production are allocable as joint costs when a
single manufacturing process produces several salable products?
a. direct material, direct labor, and overhead
b. direct material and direct labor only
c. direct labor and overhead only
d. overhead and direct material only
ANSWER: a EASY
7. Each of the following is a method to allocate joint costs except
a. relative sales value.
b. relative net realizable value.
c. relative weight, volume, or linear measure.
d. average unit cost.
ANSWER: d EASY
, Chapter 3 Organizational Cost Flows
8. Joint costs are most frequently allocated based upon relative
a. profitability.
b. conversion costs.
c. prime costs.
d. sales value.
ANSWER: d EASY
9. When allocating joint process cost based on tons of output, all products will
a. be salable at split-off.
b. have the same joint cost per ton.
c. have a sales value greater than their costs.
d. have no disposal costs at the split-off point.
ANSWER: b EASY
