Question :
61)
What Product Z5’s and Product W3’s respective production cost per : 1196109
61)
What is Product Z5’s and Product W3’s respective production cost per unit? 61)
______ A)
$2.50 and $2.88 B)
$2.05 and $3.88 C)
$2.60 and $2.88 D)
$2.60 and $3.61 E)
$2.86 and $3.68
62)
In rate regulation settings, which method is usually preferred over the sales value method? 62)
______ A)
estimated net-realizable method B)
sales value at split off method C)
constant gross-margin percentage NRV method D)
rate regulation method E)
physical measure method
63)
Advantages of the sales value at split off method include all of the following EXCEPT: 63)
______ A)
it is simple. B)
there is no anticipation of subsequent management decisions. C)
it does not presuppose an exact number of subsequent steps for further processing. D)
it uses a meaningful denominator. E)
the allocation of joint costs could lead managers to make poor decisions.
64)
Which of the following statements is TRUE concerning the practice of carrying inventories at NRV? 64)
______ A)
It is an inevitable result of joint cost allocation. B)
It results for the NRV method of joint cost allocation. C)
It results in income recognition before sales are made. D)
It is a widely-accepted practice. E)
It results from the constant gross margin NRV method.
65)
The decision of whether to process products beyond the split off process should be based on which of the following? 65)
______ A)
gross margin analysis B)
incremental operating income attainable beyond the split off point C)
revenue analysis D)
relevant cost analysis E)
production cost analysis
66)
If managers make processing or selling decisions using incremental revenue / incremental cost approach, which of the following statements is TRUE? 66)
______ A)
The resulting budgeted product-line income statement under the sales value at split off method, will show each product to have a negative operating income. B)
The resulting budgeted product-line income statement under the physical measure method, will show each product to have a positive operating income. C)
The resulting budgeted product-line income statement under the sales value at split off method, will show each product to have a positive operating income. D)
Estimated net-realizable method the resulting budgeted product-line income statement under the estimated NRV method, will show each product to have a zero operating income. E)
The resulting budgeted product-line income statement under the constant gross margin NRV method, will show each product to have a positive (or zero) operating income.
Use the information below to answer the following question(s).
Troy Company processes 15,000 litres of direct materials to produce two products, Product X and Product Y. Product X sells for $4 per litre, and Product Y, the main product, sells for $50 per litre. The following information is for August:
Beginning Ending
Production Sales Inventory Inventory
Product X:4,3754,0000375
Product Y:10,0009,625125500
The manufacturing costs totalled $15,000.
67)
How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at NRV during production ? 67)
______ A)
$1,500 B)
$16,000 C)
$14,375 D)
$17,500 E)
$0
68)
How much is the ending inventory reduction for the byproduct if byproducts are recognized in the general ledger at the point of sale ? 68)
______ A)
$17,500 B)
$16,000 C)
$0 D)
$1,500 E)
$563
69)
Which of the following entries is the initial entry to recognize a byproduct in the General ledger, based on the accounting method of recognizing byproducts at the time of production? 69)
______ A)
work in process500
byproduct inventory500 B)
cost of goods sold500
byproduct inventory500 C)
byproduct inventory500
cost of goods sold500 D)
byproduct inventory500
revenue500 E)
byproduct inventory500
work in process500
70)
What is the net effect to the income statement for the sale of byproduct, if byproducts are recognized at the point of sale? 70)
______ A)
$1,500 B)
$17,500 C)
$16,000 D)
$0 E)
$20,000
61)
D 62)
E 63)
E 64)
C 65)
B 66)
E 67)
A 68)
C 69)
E 70)
C
