12.7 Questions 1) To determine the cost of a main product with by-products, we take the cost of the.

12.7 Questions

1) To determine the cost of a main product with by-products, we take the cost of the main product and ________.

A) add separable costs of the by-products and add revenues from the by-products

B) add separable costs of the by-products and subtract revenues from the by-products

C) subtract separable costs of the by-products and add revenues from the by-products

D) subtract separable costs of the by-products and subtract revenues from the by-products

2) By-products differ from joint products because by-products have ________.

A) no joint costs before the split-off point

B) joint costs before the split-off point

C) significant sales value when compared to other products at the split-off point

D) insignificant sales value when compared to other products at the split-off point

3) Companies routinely allocate joint product costs to products for purposes of ________.

A) inventory valuation only

B) income determination only

C) decision-making such as further processing of joint products

D) inventory valuation and income determination

4) Joint costs of producing multiple products are allocated to ________.

A) main products only

B) by-products only

C) main products and by-products

D) service departments

5) Two conventional ways of allocating joint costs to products are ________.

A) physical units and incremental revenues

B) physical units and incremental expenses

C) separable costs and relative sales values

D) physical units and relative sales values

6) Corless Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Corless Company plans to produce 40,000 pounds of Product C and 20,000 pounds of Product U from 60,000 pounds of ore. Product C sells for $30 per pound and Product U sells for $40 per pound. Assume the company uses the physical-units method of allocating joint costs. What amount of joint costs is allocated to Product C?

A) $0

B) $200,000

C) $600,000

D) $800,000

7) Designer Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Designer Company plans to produce 40,000 pounds of Product C and 20,000 pounds of Product U from 60,000 pounds of ore. Product C sells for $30 per pound and Product U sells for $40 per pound. Assume the company uses the physical-units method of allocating joint costs. What amount of joint costs is allocated to Product U?

A) $0

B) $100,000

C) $300,000

D) $400,000

8) Goyette Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Goyette Company plans to produce 40,000 pounds of Product C and 20,000 pounds of Product U from 60,000 pounds of ore. Product C sells for $30 per pound and Product U sells for $40 per pound. Assume the company uses the relative-sales-value method of allocating joint costs. What amount of joint costs is allocated to Product C?

A) $400,000

B) $514,286

C) $720,000

D) $800,000

9) Santelle Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Santelle Company plans to produce 40,000 pounds of Product C and 20,000 pounds of Product U from 60,000 pounds of ore. Product C sells for $30 per pound and Product U sells for $40 per pound. Assume the company uses the relative-sales-value method of allocating joint costs. What amount of joint costs is allocated to Product U?

A) $0

B) $400,000

C) $480,000

D) $685,714

10) Denise Company manufactures three products from a joint process. Joint costs for the year amounted to $250,000. The following data was available:

Product Units Produced Sales Value at Split-off

X5,000$70,000

Y3,000$30,000

Z2,000$100,000

Assume the relative-sales-value method of allocating joint costs is used. What amount of joint costs is allocated to Product X?