Question : 31) Using the sales value at splitoff method, what the : 1211862

 

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

A) 51.74%

B) 50.00%

C) 35.83%

D) 48.26%

Answer:  C

GM percentage

$53,302/$148,750 = 0.3583

$49,718/$138,750 = 0.3583

 

32) How much (if any) extra income would Green 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 Green would have earned from selling condensed goat milk.)

A) $576,552

B) $132,250

C) $523,250

D) $181,968

33) How much (if any) extra income would Green 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) $132,250

B) $576,552

C) $523,250

D) $181,968

34) Chem Manufacturing Company processes direct materials up to the splitoff 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 gallons (10,000 gallons yield 9,500 gallons of good product and 500 gallons of shrinkage)

 

Production:X5,000 gallons

Y4,500 gallons

 

Sales:X4,750 at $150 per gallon

Y4,000 at $100 per gallon

 

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

 

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

 

Using the physical-volume method, what is Product X’s approximate gross-margin percentage?

A) 32%

B) 34%

C) 35%

D) 38%

35) Beverage Drink Company processes direct materials up to the splitoff point where two products, A and B, are obtained. The following information was collected for the month of July:

 

Direct materials processed:2,500 liters (with 20% shrinkage)

 

Production:A1,500 liters

B500 liters

 

Sales:A$15.00 per liter

B$10.00 per liter

 

The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters of good products was $4,500. There were no inventory balances of A and B.

 

Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.

 

Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.

 

If Product Z5 and Product W3 are produced, what are the expected sales values of production, respectively?

A) $11,250 and $34,375

B) $22,500 and $ 5,000

C) $31,250 and $10,500

D) $34,375 and $11,250

36) Cola Drink Company processes direct materials up to the splitoff point where two products, A and B, are obtained. The following information was collected for the month of July:

 

Direct materials processed:2,500 liters (with 20% shrinkage)

 

Production:A1,500 liters

B500 liters

 

Sales:A$15.00 per liter

B$10.00 per liter

 

The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters of good products was $4,500. There were no inventory balances of A and B.

 

Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.

 

Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.

 

What is Product Z5’s estimated net realizable value at the splitoff point?

A) $11,100

B) $22,350

C) $34,225

D) $34,375

 

37) Which of the following is true of the physical-measure approach of allocating joint costs?

A) Costs cannot be allocated if the measurement basis for each product are different.

B) Physical measures usually result in less costs being allocated to the product that weighs the most.

C) The physical measure reflects a product’s ability to generate revenues.

D) Obtaining comparable physical measures for all products is always straightforward.

Answer the following questions using the information below:

 

The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:

Direct Materials processed:18,000 gallons (after shrinkage)

 

Production:

Butter Cream

7,500

gallons

 

Condensed Milk

10,500

gallons

Sales:

Butter Cream

7,000

gallons

 

Condensed Milk

10,000

gallons

Sales Price:

Butter Cream

$3.5

per gallon

 

Condensed Milk

$7.5

per gallon

Separable costs in total:

Butter Cream

$12,500

 

 

Condensed Milk

$34,700

 

 

The cost of purchasing the of unprocessed milk and processing it up to the splitoff point to yield a total of 18000 gallons of saleable product was $46,000.

 

The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.

 

38) What is the constant gross-margin percent for Kenton?

A) 10%

B) 6.3%

C) 11%

D) 6.5%

39) What is the allocated joint costs of Condensed Milk?

A) $35,200

B) $10,800

C) $12,500

D) $34,700

 

40) What is the allocated joint costs of Butter Cream?

A) $35,200

B) $12,500

C) $34,700

D) $10,800