Question :
21) Using estimated net realizable value, what amount of the : 1186053
21) Using estimated net realizable value, what amount of the $72,240 of joint costs would be allocated Xyla and the skim goat ice cream?
A) $41,971 and $30,269
B) $44,471 and $27,769
C) $32,796 and $39,444
D) $36,120 and $36,120
E) $39,444 and $32,796
22) How much (if any) extra income would Morton earn if it produced and sold all of the Xyla from the condensed goat milk? Allocate joint processing costs based upon relative sales value on the splitoff. (Extra income means income in excess of what Morton would have earned from selling condensed goat milk.)
A) $53,063
B) $254,213
C) $201,150
D) $96,787
E) $259,650
23) How much (if any) extra income would Morton earn if it produced and sold skim milk ice cream from goats rather than goat skim milk? Allocate joint processing costs based upon the relative sales value at the splitoff point.
A) $47,047
B) $117,297
C) $101,650
D) $70,250
E) $171,900
24) The constant gross-margin percentage NRV method of joint cost allocation
A) involves allocating costs in such a way that maintaining the same gross margin percentage for each product that was obtained in prior years.
B) involves allocating costs in such a way that the overall gross margin percentage is identical for the individual products.
C) is the same as the estimated NRV method.
D) is the same as the sales-value at splitoff method.
E) will result in different gross margins for each product.
25) Which method of allocating costs would be used if the selling prices of all products at the splitoff point are unavailable?
A) sales value at splitoff method
B) NRV method
C) physical measures method
D) constant gross-margin percentage method
E) reciprocal method
26) What is the reason that accountants do not like to carry inventory at net realizable value?
A) NRV is the most difficult costing method.
B) NRV recognizes income after the sale is complete.
C) NRV recognizes income before sales are made.
D) NRV is acceptable to the taxing authorities.
E) NRV is normally known.
27) When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the
A) total amount of the joint costs.
B) portion of the joint costs allocated to the individual products.
C) extra revenue earned past the splitoff point.
D) extra operating income earned past the splitoff point.
E) joint costs allocated under the NRV method.
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.
28) Using the NRV method, the amount of joint costs allocated to Jaxton is:
A) $170,408
B) $278,280
C) $121,720
D) $389,592
E) $111,312
29) Using the NRV method, the amount of joint costs allocated to Kraxton is:
A) $170,408
B) $278,280
C) $121,720
D) $389,592
E) $111,312
30) The incremental benefit or (loss) of processing Jarlon into Jaxton is:
A) $480,000
B) ($128,000)
C) $64,000
D) ($96,000)
E) ($32,000)
