Exam 6: Joint and By-Product Costing

A joint producft should be processed beyond split-off if additional revenue from further processing exceeds

Figure 6-11 Information about three joint products follows: X Y Z Anticipated production 12,000. 8,000. 7,000. Selling price /. at split-off £16 £26 £48 Additional processing costs /. after split-off (all variable) £8 £20 £20 Selling price /. after further processing £20 £40 £70 The cost of the joint process is £140,000. -Refer to Figure 6-11. Assuming all of the sell now or process further decisions were correctly made, what will be the firm's income?

Figure 6-5 Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run costs £50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of £60 per unit and £40 per unit for Dulls. The market price is £250 for Brights and £200 for Dulls. -Refer to Figure 6-5. What is the gross profit for Brights assuming the physical units method is used?

The cost of crude oil used in producing gasoline products is an example of

Which of the following would generally be a by-product?

Which of the following costs is NOT relevant to a decision to sell a product at split-off or process the product further and then sell the product?

Figure 6-6 Suppose that a sawmill processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of £300,000: Grade Board Feet Final Sales Value First and second 75,000 £56,250 No. 1 common 200,000 180,000 No. 2 common 100,000 105,000 No. 3 common 125,000 127,500 -Refer to Figure 6-6. No. 2 common can be cut into 2 * 4s. The final sales value will increase to £150,000. The cost of cutting No. 2 common is £15,000. Should the No. 2s be cut into 2 *4s?

Refer to Figure 6-3. What is the amount of joint costs assigned to Product X using the sales-value-at-split-off method?

Carey Ltd. manufactures products X and Y from a joint process. Joint product costs were £60,000 during the month of December. Additional information is as follows: Sales Value at Product Units Produced Split-Off per Unit X 10,000 £24 Y 5,000 £8 What is the amount of joint product costs to be allocated to product X during December using the physical units method?

Ottawa Ltd. produces two products from a joint process. Information about the two joint products is as follows: Product Product Anticipated production (in kgs) 2,000 4,000 Selling price per kg at split-off £30 £16 Additi onal processing costs per after split-off (all variable) £15 £30 Selling price per kg after further processing £40 £50 -Refer to Figure 6-12. Which of Ottawa's joint products should be sold at split-off?

Figure 6-6 Suppose that a sawmill processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of £300,000: Grade Board Feet Final Sales Value First and second 75,000 £56,250 No. 1 common 200,000 180,000 No. 2 common 100,000 105,000 No. 3 common 125,000 127,500 -Refer to Figure 6-6. What amount of joint costs will be allocated to No. 2 common using the constant gross margin percentage method?

____ are products with substantial value which are produced simultaneously by the same process up to a split-off point.

Figure 6-8 James Ltd. produces three products in a joint process: A, B, and C. The joint costs are as follows: Direct materials £50,000 Direct labour 20,000 Overhead 40,000 The split-off values for A, B, and C are £80,000, £100,000, and £60,000, respectively. If management processes the three products beyond the split-off point, sales values for A, B, and C would increase to £150,000, £130,000, and £120,000, respectively. In order to process the products further, the company must incur separable costs of £14,000, £12,000, and £10,000 for products A, B, and C, respectively. James uses the sales-value-at-split-off method to allocate joint costs. -Refer to Figure 6-8. Should James Ltd. process A further?

The ____ is where products become distinguishable after passing through a common process.

Joint costs are

Figure 6-1 Gilbert Production Company incurred £150,000 to manufacture the following products in a joint process: Selling Price Product Units Produced Weight per Unit per Unit A 250 4. £20 500 3. 40 750 2. 40 1,000 1. 20 -Refer to Figure 6-1. How much joint cost would be allocated to product B based on the physical units method?

Refer to Figure 6-3. What is the amount of joint costs assigned to Product Y using the sales-value-at-split-off method?

Figure 6-11 Information about three joint products follows: X Y Z Anticipated production 12,000. 8,000. 7,000. Selling price /. at split-off £16 £26 £48 Additional processing costs /. after split-off (all variable) £8 £20 £20 Selling price /. after further processing £20 £40 £70 The cost of the joint process is £140,000. -Refer to Figure 6-11. If the firm is currently processing all three products beyond split-off, the firm's income would be

Figure 6-7 Suppose that a concrete manufacturer produces four grades of concrete totaling 500,000 cubic yards as follows at a joint cost of £2,000,000: Grade Cubic Yards Sales Value A 75,000 £375,000 B 200,000 1,200,000 C 100,000 700,000 D 125,000 850,000 -Refer to Figure 6-7. What amount of joint costs will be allocated to Grade C using the constant gross margin percentage method?

Which joint cost allocation method is described by the following statement? Joint cost is backed into. First, overall sales revenue minus overall costs (joint plus further processing costs) is calculated to yield gross profit and the gross profit percentage. Then, each product is assigned the same cost of goods sold percentage.