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CHAPTER 16: COST ALLOCATION: JOINT PRODUCTS AND BYPRODUCTS TRUE/FALSE 1. Joint costs are incurred beyond the splitoff point and are assignable to individual products. Answer : False Difficulty : 2 Objective : 1 Joint costs are incurred prior to the splitoff. 2. Separable costs are assignable after the splitoff point. Answer : True Difficulty : 2 Objective : 1 3. The focus of joint costing is assigning costs to individual products as assembly occurs. Answer : False Difficulty : 2 Objective : 1 The focus is accumulating costs incurred on the joint products. 4. A byproduct has a minimal sales value. Answer : True Difficulty : 2 Objective : 2 5 The sales value at splitoff method is an example of allocating costs based upon the benefits-received criterion. Answer : True Difficulty : 2 Objective : 4 6. A major deficiency of the sales value at splitoff method is that this method does not allow management to obtain individual product costs and gross-margin information. Answer : False Difficulty : 2 Objective : 4 The sales value at splitoff method enables the accountant to obtain individual product costs and gross margins. 7. An advantage of the physical-measure method is that obtaining physical measures for all products is an easy task. Answer : False Difficulty : 2 Objective : 4 For some products such as gas, obtaining physical measures is difficult. 8. The general guideline for using the physical-measure method is to include only joint products or main products in the physical-measure weighting computations. Answer : True Difficulty : 2 Objective : 4 Chapter 16 Page 1 9. The estimated net realizable value method is used when the market selling prices at the splitoff point are not available. Answer : True Difficulty : 2 Objective : 4 10. Net realizable value generally means expected sales value plus expected separable costs. Answer : False Difficulty : 2 Objective : 4 Net realizable value is expected sales value minus expected separable costs. 11. The net realizable value method is generally used for products or services that are processed and after splitoff additional value is added to the product and a selling price can be determined. Answer : True Difficulty : 2 Objective : 4 12. 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. Answer : True Difficulty : 2 Objective : 4 13. The constant gross-margin percentage method differs from market-based joint-cost allocation method (sales value at splitoff and estimated net realizable value) since no account is taken of profits earned before or after the splitoff point when allocating joint costs.... View Full Document

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