COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Question
Chapter 16, Problem 16.7Q
To determine
Relative Sales Value at Split off Method:
Relative sales value at split off method allocates joint cost on the basis of sum total of sales value at the split off point.
Net Realizable Value (NRV) Method:
NRV method is a method of joint cost allocation which takes into consideration additional costs required to be incurred in the further processing of the products.
To identify: Situation where NRV method can be used but not sales value at split off method.
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Students have asked these similar questions
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
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
[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
Chapter 16 Solutions
COST ACCOUNTING
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16MCQCh. 16 - Joint costs of 8,000 are incurred to process X and...Ch. 16 - Houston Corporation has two products, Astros and...Ch. 16 - Dallas Company produces joint products, TomL and...Ch. 16 - Earls Hurricane Lamp Oil Company produces both A-1...Ch. 16 - Joint-cost allocation, insurance settlement....Ch. 16 - Joint products and byproducts (continuation of...Ch. 16 - Net realizable value method. Sweeney Company is...Ch. 16 - Alternative joint-cost-allocation methods,...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Prob. 16.26ECh. 16 - Joint-cost allocation, sales value, physical...Ch. 16 - Joint-cost allocation: Sell immediately or process...Ch. 16 - Accounting for a main product and a byproduct....Ch. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Methods of joint-cost allocation, ending...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Comparison of alternative joint-cost-allocation...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Joint-cost allocation. SW Flour Company buys 1...Ch. 16 - Further processing decision (continuation of...Ch. 16 - Joint-cost allocation with a byproduct. The...Ch. 16 - Byproduct-costing journal entries (continuation of...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Prob. 16.41PCh. 16 - Prob. 16.42PCh. 16 - Methods of joint-cost allocation, comprehensive....
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Similar questions
- Refer to Exercise 7.25 and allocate the joint costs using the sales-value-at-split-off method.arrow_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_forwardUnder 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 costarrow_forward
- Which of the following is the most commonly used method for assignment of joint costs? a. Relative sales value b. Split-off method c. Average production cost d. Relative percentage of direct costs basisarrow_forwardV4. Give two limitations of the physical measure method of a joint -cost allocation. Distinguish between the sales volume at split off method and the NRV method.arrow_forwardUsing 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?arrow_forward
- 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?arrow_forwardExplain why using cost as a transfer price is inappropri-ate when the center producing the product is evaluated as a profit center.arrow_forwardFor joint cost allocation: only the net realizable method can be used to allocate joint costs to by-products. only the relative sales value method can be used to allocate joint costs to scrap. separable costs do not include disposal costs. no joint costs are allocated to by-products or scrap. the most accurate method is the one using physical measures of output.arrow_forward
- Which of the following is not a feature of full costplus sales pricing related to a range of a company’sproducts? it may not maximise profitit distinguishes between variable, fixed and opportunity costsit requires the apportionment of shared costsit ignores the relationship between demand and pricesarrow_forwardWhich of the following methods is used to determine the sales volume necessary to achieve a target profit? None of the above Contribution margin ratio method Unit sales method Absorption costing methodarrow_forwardAre allocated joint processing costs relevant when making a decision to sell a joint product at the split-off point or process it further? Why?arrow_forward
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