In which scenario would an adjusted sales value be used to assign costs? a. If abnormal losses occur during production of joint products b. If a joint product is to be processed further after the point of separation c. If one of the joint products has negligible market value d. If joint products are separately identifiable before split-off point

In which scenario would an adjusted sales value be used to assign costs? a. If abnormal losses occur during production of joint products b. If a joint product is to be processed further after the point of separation c. If one of the joint products has negligible market value d. If joint products are separately identifiable before split-off point

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 12DQ: If the minimum transfer price of the selling division is less than the maximum transfer price of the...

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If the minimum transfer price of the selling division is less than the maximum transfer price of the buying division, the intermediate product should be transferred internally. Do you agree or disagree? Why?
Which of the following statements is true? An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision. It is profitable to continue processing joint products after the split-off point if their total revenues exceed the joint costs. Which of the following statements is true? Consistency demands that a cost that is relevant in one decision be regarded as relevant in other decisions as well. Variable costs are always relevant costs in decisions.
In the sell-or-process-further decision,a. joint costs are always relevant.b. total costs of joint processing and further processing are relevant.c. all costs incurred prior to the split-off point are relevant.d. the most profitable outcome may be to further process some separately identifiable products beyond the split-off point, but sell others at the split-off point.e. None of these
[CPA Adapted] For purposes of allocating joint costs to joint products, the sales value at splitoff method could be used in which of the following situations? No costs Cost beyond beyond splitoff splitoff a. Yes No b. Yes No c. No Yes d. No Yes
Which of the following choices correctly denotes the data needed to allocate joint costs under the relative-sales-value method? Sales Value of Product at Split-Off Separable Cost Sales Value of Product After Processing Beyond Split-Off A. Yes Yes No B. Yes Yes Yes C. Yes No No D. No Yes Yes E. No No Yes Choice A Choice D Choice C Choice B Choice E
Which of the following methods allocates joint costs based on the potential market value at the point where the products will be separated to be processed further? a.net realizable value method b.weighted average method c.market value at split-off method d.physical units method
Under net realizable value method of apportioning joint costs to joint products, the selling & distribution cost is: a. Deducted from sales value b. Deducted from further processing cost c. Ignored d. Added to joint cost
Are allocated joint processing costs relevant when making a decision to sell a joint product at the split-off point or process it further? Why?
Products G and H are joint products developed from the same process with each being processed further. Joint costs are incurred until split-off, the separable costs are incurred in further refining each product. Sales values of G and H at split-off are used to allocate joint costs. If the sales value of G at split-off increases and all other costs and selling prices remain unchanged, the gross margin of A. G- decreases while H increases B. G- increases while H decreases C. G- increases and H increases D. G- decreases and H decreases
Which of the following statements best describes a by-product? Multiple Choice A product created along with the main product whose sales value does not cover its cost of production. A product that is produced from material that would otherwise be scrap. A product that usually produces a small amount of revenue when compared to the main product's revenue. A product that has a lower unit selling price than the main unit. A product that has a selling price similar to that of the main product.
Using sales value at split-off, what amount of joint processing cost is allocated to Product Alpha? Using a physical measurement method, what amount of joint processing cost is allocated to Product Gamma? Using net realizable value at split-off, what amount of joint processing cost is allocated to Product Delta?
Using a physical measurement method, what amount of joint processing cost is allocated to product B? Using sales value at split-off, what amount of joint processing cost is allocated to Product B?