Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Question
Chapter 11, Problem 11RQ
To determine
Determine the costs that should not be considered for making the decision regarding selling a product or processing it further.
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What are joint costs? How do they affect the sell or process further decision?
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?
Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision.
What is the decision rule in deciding whether to sell a product or process it further?
Chapter 11 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 11 - Why do companies allocate costs? What are some of...Ch. 11 - What are the three methods of allocating service...Ch. 11 - What are the similarities and differences among...Ch. 11 - What criterion should be used to determine the...Ch. 11 - What is a limitation of the direct method of...Ch. 11 - What is a limitation of the step method of...Ch. 11 - Prob. 7RQCh. 11 - Why would a number of accountants express a...Ch. 11 - Prob. 9RQCh. 11 - What is the basic difference between the...
Ch. 11 - Prob. 11RQCh. 11 - If cost allocations arc arbitrary and potentially...Ch. 11 - Prob. 13CADQCh. 11 - Prob. 14CADQCh. 11 - Prob. 15CADQCh. 11 - Prob. 16CADQCh. 11 - Prob. 17CADQCh. 11 - Prob. 18CADQCh. 11 - What are some of the factors that a company needs...Ch. 11 - Prob. 20CADQCh. 11 - Prob. 21CADQCh. 11 - Prob. 22CADQCh. 11 - How is joint cost allocation like service...Ch. 11 - Prob. 24CADQCh. 11 - In what ways is joint cost allocation similar to...Ch. 11 - Why Are Costs Allocated?Ethical Issues You are the...Ch. 11 - Cost Allocation: Direct Method Caro Manufacturing...Ch. 11 - Allocating Service Department Costs First to...Ch. 11 - Cost Allwat ion: Direct Method University Printers...Ch. 11 - Prob. 30ECh. 11 - Cost Allocation: Step Method
Refer to the data for...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Cost Allocation: Reciprocal Method, Two Service...Ch. 11 - Cost Allocation: Reciprocal Method
Refer to the...Ch. 11 - Prob. 35ECh. 11 - Prob. 36ECh. 11 - Prob. 37ECh. 11 - Prob. 38ECh. 11 - Prob. 39ECh. 11 - Prob. 40ECh. 11 - Net Realizable Value Method: Multiple Choice
Oak...Ch. 11 - Sell or Process Further: Multiple Choice
Refer to...Ch. 11 - Net Realizable Value Method Euclid Corporation...Ch. 11 - Estimated Net Realizable Value Method Blasto,...Ch. 11 - Net Realizable Value Method to Solve for Unknowns...Ch. 11 - Net Realizable Value Method Bixel Components...Ch. 11 - Net Realizable Value Method with By-Products...Ch. 11 - Net Realizable Value Method Deming Sons...Ch. 11 - Physical Quantities Method
Refer to the facts in...Ch. 11 - Sell or Process Further
Refer to the facts in...Ch. 11 - Physical Quantities Method The following questions...Ch. 11 - Physical Quantities Method; Sell or Process...Ch. 11 - Physical Quantities Method with By-Product...Ch. 11 - Step Method with Three Service Departments Model,...Ch. 11 - Comparison of Allocation Methods BluStar Company...Ch. 11 - Solve for Unknowns: Direct Method Franks Foods has...Ch. 11 - Solve for Unknowns: Step Method RT Renovations is...Ch. 11 - Cost Allocation: Step Method with Analysis and...Ch. 11 - Prob. 59PCh. 11 - Prob. 60PCh. 11 - Direct, Step, and Reciprocal Methods:...Ch. 11 - Cost Allocation: Step and Reciprocal Methods...Ch. 11 - Allocate Service Department Costs: Direct and Step...Ch. 11 - Prob. 64PCh. 11 - Prob. 65PCh. 11 - Prob. 66PCh. 11 - Prob. 67PCh. 11 - Prob. 68PCh. 11 - Fletcher Fabrication, Inc., produces three...Ch. 11 - Findina Missing Data: Net Realizable Value Spartan...Ch. 11 - Finding Missing Data: Net Realizable Value Blaine,...Ch. 11 - Joint Costing in a Process Costing Context:...Ch. 11 - Find Maximum Input Price: Estimated Net Realizable...Ch. 11 - Effect of By-Product versus Joint Cost Accounting...Ch. 11 - Prob. 75PCh. 11 - Prob. 76P
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Similar questions
- If an outside, perfectly competitive market exists for the intermediate product, what should the transfer price be? Why?arrow_forwardWhat is a general rule to remember with respect to a sell-or-process-further environment, and what costs are irrelevant to the decision?arrow_forwardIf 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?arrow_forward
- What is the financial advantage (disadvantage) of further processing each of the three products beyondthe split-off point?arrow_forwardWhat is the financial advantage (disadvantage) of further processing the intermediateproduct?arrow_forwardA decision that involves potential further processing of joint products is which kind of decision? relevant make-or-buy sell-or-process-further special-order keep-or-droparrow_forward
- 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 thesearrow_forwardGive an example on the Sell or process further and solve itarrow_forwardWhich 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.arrow_forward
- 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 pointarrow_forwardWhich of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize productionarrow_forwardCalculate the lowest acceptable transfer price for the seller (Division A) ?arrow_forward
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