Question : 31) In rate regulation settings, which method usually preferred over : 1186046

 

31) In rate regulation settings, which method is usually preferred over the sales value method?

A) constant gross-margin percentage NRV method

B) estimated net-realizable method

C) physical measure method

D) sales value at split off method

E) rate regulation method

32) Advantages of the sales value at split off method include all of the following EXCEPT

A) it does not presuppose an exact number of subsequent steps for further processing.

B) it uses a meaningful denominator.

C) there is no anticipation of subsequent management decisions.

D) it is simple.

E) the allocation of joint costs could lead managers to make poor decisions.

 

33) The Arvid Corporation manufactures widgets, gizmos, and turnbols from a joint process. May production is 4,000 widgets; 7,000 gizmos; and 8,000 turnbols. Respective per unit selling prices at splitoff are $15, $10, and $5. Joint costs up to the splitoff point are $75,000. If joint costs are allocated based upon the sales value at splitoff, what amount of joint costs will be allocated to the widgets?

A) $30,882

B) $26,471

C) $17,647

D) $28,125

E) $60,000

 

34) Product X is sold for $8 a unit and Product Y is sold for $12 a unit. Each product can also be sold at the splitoff point. Product X can be sold for $5 and Product Y for $4. Joint costs for the two products totaled $4,000 for January for 600 units of X and 500 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value at splitoff method is used?

A) $2.96 and $4.44

B) $4.00 and $4.55

C) $4.00 and $3.20

D) $4.55 and $4.55

E) $3.20 and $4.00

Answer the following question(s) using the information below.

 

The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:

 

 

Production:

Mr. DirtOut

147,500 litres

 

Mr. SinkClean

95,000 litres

 

 

 

Sales:

Mr. DirtOut

140,500 at $110 per litre

 

Mr. SinkClean

91,000 at $100 per litre

 

The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.

 

35) What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?

A) 59.00% and 41.00%

B) 60.82% and 39.18%

C) 39.18% and 60.82%

D) 59.79% and 40.21%

E) 41.00% and 59.00%

 

36) When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to Mr. DirtOut and Mr. SinkClean?

A) $231,116 and $148,884

B) $224,200 and $155,800

C) $227,202 and $152,798

D) $155,800 and $224,200

E) $148,884 and $231,116

37) When using the physical-volume method, what is Mr. DirtOut’s approximate production cost per unit?

A) $1.52

B) $1.54

C) $1.57

D) $1.61

E) $1.01

 

Answer the following question(s) using the information below:

 

The Morton Company processes unprocessed goat milk up to the splitoff point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October:

 

 

Production:

condensed goat milk

26,100 litres

 

skim goat milk

32,400 litres

 

 

 

Sales:

condensed goat milk

$3.50 per litre

 

skim goat milk

$2.50 per litre

 

The costs of purchasing the 65,000 litres of unprocessed goat milk and processing it up to the splitoff point to yield a total of 58,500 litres of salable product was $72,240. There were no inventory balances of either product.

 

Condensed goat milk may be processed further to yield 19,500 litres (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $3 per usable litre. Xyla can be sold for $18 per litre.

 

Skim goat milk can be processed further to yield 28,100 litres of skim goat ice cream, for an additional processing cost per usable litre of $2.50. The product can be sold for $9 per litre.

 

There are no beginning and ending inventory balances.

 

38) Using the sales value at splitoff method, what is the gross-margin percentage for condensed goat milk at the splitoff point?

A) 21.1%

B) 55.1%

C) 58.1%

D) 38.2%

E) 41.9%

 

39) Using the sales value at splitoff method, what is the gross-margin percentage for skim goat milk at the splitoff point?

A) 21.1%

B) 55.1%

C) 58.1%

D) 38.2%

E) 41.9%

Cranbrook Chemical Ltd. manufactures two industrial compounds. In the month of May, 15,000 litres of direct material costing $160,000 were processed at a cost of $400,000. The joint process yielded 16,000 containers of a compound known as Jarlon and 4,000 containers of a compound known as Kharton. The respective selling prices of Jarlon and Kharton are $38 and $58. Both products may be processed further. Jarlon may be processed into Jaxton at an incremental cost of $8 per jar of the final product while Kharton may be processed into Kraxton at an additional cost of $32 per jar of the final product. The volume of jars of the final product are: 12,000 and 3,000 for Jaxton and Kraxton respectively. The selling price of Jaxton is $48 per jar. The selling price of Kraxton is $102 per jar.

 

40) Using the sales value at split off method, the percentage weightings for joint cost allocations for Jarlon and Kharton respectively are:

A) 27.62% and 72.38%

B) 80.00% and 20.00%

C) 39.58% and 60.42%

D) 72.38% and 27.62%

E) 60.42% and 39.58%