Question : 31) Chem Manufacturing Company processes direct materials up to the split : 1196106

 

31)

Chem Manufacturing Company processes direct materials up to the split off point, where two products (X and Y) are obtained and sold. The following information was collected for the month of November.

 

Direct materials processed:

10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)

 

Production: X 5,000 litresY 4,500 litres

Sales:X 4,750 at $150 per litreY 4,000 at $100 per litre

 

The cost of purchasing 10,000 litres of direct materials and processing it up to the split off point to yield a total of 9,500 litres of good products was $975,000.

 

The beginning inventories totalled 50 litres for X and 25 litres for Y. Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y. October costs per unit were the same as November.

 

What is the approximate amount of joint costs in Product Y’s ending inventory if the physical volume method is used and the company uses the FIFO inventory method? 31)

______ A)

$50,917 B)

$60,145 C)

$53,886 D)

$67,358 E)

$60,285

32)

Assigning joint costs when only a portion of a business’ products are sold to a single customer, is an example of which of the following? 32)

______ A)

price regulation. B)

inventory costing for external financial statements C)

Customer profitability analysis D)

rate regulation requirements. E)

cost reimbursement

33)

All of the following methods may be used to allocate joint costs EXCEPT 33)

______ A)

the sales value at split off method. B)

the constant gross-margin percentage NRV method. C)

the present-value allocation method. D)

the estimated net realizable value method. E)

the physical measure method.

34)

Which of the following is NOT a strategy for costing inventory when joint-cost circumstances are involved? 34)

______ A)

allocate costs based a constant gross margin B)

allocate costs according to a predetermined physical measure C)

allocate costs according to the amount in the respective cost pools D)

allocate costs according to the market selling-price E)

use the estimated net realizable value

35)

Which of the following statements is TRUE in regard to the cause-and-effect relationship between allocated joint costs and individual products? 35)

______ A)

A high individual product value results in a high level of joint costs. B)

The cause-and-effect relationship depends on the relative costs to be incurred after split off C)

A low individual product value results in a low level of joint costs. D)

A high individual product value results in a low level of joint costs. E)

There is no cause-and-effect relationship.

Use the information below to answer the following question(s).

 

Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the split off point, where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of October.

 

Trees processed:

50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)

 

Production:

paper30,000 sheets

pencil casings30,000

 

Sales:

paper29,000 at $0.04 per page

pencil casings30,000 at $0.10 per casing

 

Cost of purchasing 50 trees and processing them up to the split off point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.

 

Raynor Manufacturing’s accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.

36)

What is the paper’s sales value at the split off point? 36)

______ A)

$1,200 B)

$120 C)

$3,000 D)

$1,950 E)

$1,160

37)

What are the paper’s and the pencil’s approximate weighted cost proportions using the sales value at split off method, respectively? 37)

______ A)

$4,500 B)

$1,480 C)

$300 D)

$3,750 E)

$3,000

38)

What are the paper’s and the pencil’s approximate weighted cost proportions using the sales value at split off method, respectively? 38)

______ A)

33.33% and 66.67% B)

50.00% and 50.00% C)

40% and 60% D)

49.00% and 51.00% E)

28.57% and 71.43%

39)

What are the approximate joint costs assigned to the paper ending inventory if joint costs are allocated using the sales value at split off method? 39)

______ A)

$428.55 B)

$435.00 C)

$14.29 D)

$750.00 E)

$50.00

40)

What is the approximate cost assigned to the pencil casings if joint costs are allocated using the sales value at split off method? 40)

______ A)

$1,005 B)

$765 C)

$1,500 D)

$750 E)

$1,071

41)

What is the paper’s production approximate cost per unit if the sales value at split off method is used?

31)

C 32)

E 33)

C 34)

C 35)

E 36)

A 37)

E 38)

E 39)

C 40)

E