cost12etif_16 - CHAPTER 16 COST ALLOCATION JOINT PRODUCTS...

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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 Terms to Learn : joint costs, splitoff point Joint costs are incurred prior to the splitoff. 2. Separable costs are assignable after the splitoff point. Answer : True Difficulty : 2 Objective : 1 Terms to Learn : separable costs, splitoff point 3. The focus of joint costing is assigning costs to individual products as assembly occurs. Answer : False Difficulty : 2 Objective : 1 Terms to Learn : joint costs The focus is accumulating costs incurred on the joint products. 4. The costs of production that yield multiple products simultaneously are known as joint costs. Answer : True Difficulty : 1 Objective : 1 Terms to Learn : joint costs 5. The juncture in a joint production process when two products become separable is the byproduct point. Answer : False Difficulty : 1 Objective : 1 Terms to Learn : byproducts, splitoff point The juncture in a joint production process when two products become separable is the splitoff point. 6. A byproduct has a minimal sales value. Answer : True Difficulty : 2 Objective : 2 Terms to Learn : byproducts 16-1
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7. All products yielded from joint product processing have some positive value to the firm. Answer : False Difficulty : 1 Objective : 2 Terms to Learn : byproducts, joint products Not all products yielded from joint product processing have some positive value to the firm. 8. Litigation may be a reason that joint costs are allocated to individual products. Answer : True Difficulty : 1 Objective : 3 Terms to Learn : joint costs 9. The sales value at splitoff method is an example of allocating costs based upon the benefits-received criterion. Answer : True Difficulty : 2 Objective : 4 Terms to Learn : sales value at splitoff method 10. 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 Terms to Learn : sales value at splitoff method The sales value at splitoff method enables the accountant to obtain individual product costs and gross margins. 11. 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 Terms to Learn : physical-measure method For some products such as gas, obtaining physical measures is difficult. 12. 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 Terms to Learn : physical-measure method, joint products, main products 13. The estimated net realizable value method is used when the market selling prices at the splitoff point are not available.
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