108.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000              70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, what effect will occur to Diva Footwear’s net income?

A.Increase by $9,000

B.Decrease by $56,000

C.Decrease by $11,000

D.Increase by $56,000

109.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000              140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, sales of athletic shoes are expected to drop by 10%. What impact will occur to Diva Footwear’s net income?

A.Income will decrease by $11,000.

B.Income will decrease by $31,000.

C.Income will decrease by $53,000.

D.Income will increase by $9,000.

110.The following information is available for Diva Footwear’s segments:

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

Diva Footwear normally sells boots for $90 per pair. An exporter has approached Diva about buying 1,000 pairs of boots for a one-time export deal for $81 per pair. Diva can avoid $3.00 per pair of the normal variable cost on this sale, but Diva must pay a fixed cost of $4,000 to have the boots shipped. Diva has the capacity to produce this order, and no regular sales will be affected. What affect will occur on Diva’s profits if the order is accepted?

A.Profits will increase by $42,000.

B.Profits will increase by $49,000.

C.Profits will increase by $45,000.

D.More information is needed to answer.

111.Hurley Processors processes clay into two joint products—molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physical quantities method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$40.00

112.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physicalquantities method is used to allocate the joint costs, how much will be allocated to each batch of craft blocks?

A.$1.20

B.$28.00

C.$8.75

D.$120.00

113.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, what is the total amount that will be allocated to each batch?

A.$55

B.$35

C.$160

D.None of these answer choices are correct.

114.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$15.00

115.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35.If the relative sales value method is used to allocate the joint costs, how much will be allocated to craft blocks?

A.$8.75

B.$26.25

C.$28.00

D.$15.00

116.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. How much joint cost should be allocated to Product Ausing the relative sales value at split-off as the allocation method?

A.$600,000

B.$126,316

C.$400,000

D.$240,000

117.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. Which product(s) should be processed further?

A.A

B.B

C.Neither A nor B

D.Both A and B

108.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000              70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, what effect will occur to Diva Footwear’s net income?

A.Increase by $9,000

B.Decrease by $56,000

C.Decrease by $11,000

D.Increase by $56,000

109.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000              140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, sales of athletic shoes are expected to drop by 10%. What impact will occur to Diva Footwear’s net income?

A.Income will decrease by $11,000.

B.Income will decrease by $31,000.

C.Income will decrease by $53,000.

D.Income will increase by $9,000.

110.The following information is available for Diva Footwear’s segments:

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

Diva Footwear normally sells boots for $90 per pair. An exporter has approached Diva about buying 1,000 pairs of boots for a one-time export deal for $81 per pair. Diva can avoid $3.00 per pair of the normal variable cost on this sale, but Diva must pay a fixed cost of $4,000 to have the boots shipped. Diva has the capacity to produce this order, and no regular sales will be affected. What affect will occur on Diva’s profits if the order is accepted?

A.Profits will increase by $42,000.

B.Profits will increase by $49,000.

C.Profits will increase by $45,000.

D.More information is needed to answer.

111.Hurley Processors processes clay into two joint products—molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physical quantities method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$40.00

112.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physicalquantities method is used to allocate the joint costs, how much will be allocated to each batch of craft blocks?

A.$1.20

B.$28.00

C.$8.75

D.$120.00

113.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, what is the total amount that will be allocated to each batch?

A.$55

B.$35

C.$160

D.None of these answer choices are correct.

114.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$15.00

115.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35.If the relative sales value method is used to allocate the joint costs, how much will be allocated to craft blocks?

A.$8.75

B.$26.25

C.$28.00

D.$15.00

116.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. How much joint cost should be allocated to Product Ausing the relative sales value at split-off as the allocation method?

A.$600,000

B.$126,316

C.$400,000

D.$240,000

117.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. Which product(s) should be processed further?

A.A

B.B

C.Neither A nor B

D.Both A and B

108.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000              70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, what effect will occur to Diva Footwear’s net income?

A.Increase by $9,000

B.Decrease by $56,000

C.Decrease by $11,000

D.Increase by $56,000

109.Diva Footwear is contemplating if it should continue producing platform shoes. The following information is available for the company’s segments.

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000              140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

If platform shoes are dropped, sales of athletic shoes are expected to drop by 10%. What impact will occur to Diva Footwear’s net income?

A.Income will decrease by $11,000.

B.Income will decrease by $31,000.

C.Income will decrease by $53,000.

D.Income will increase by $9,000.

110.The following information is available for Diva Footwear’s segments:

PlatformShoesAthletic ShoesBoots

Sales              $120,000              $420,000              $360,000

Variable costs                64,000              220,000                140,000

Contribution margin              56,000              200,000              220,000

Direct fixed costs              45,000              70,000              90,000

Allocated fixed costs                20,000                70,000                60,000

Net income              ($9,000)              $60,000              $70,000

Diva Footwear normally sells boots for $90 per pair. An exporter has approached Diva about buying 1,000 pairs of boots for a one-time export deal for $81 per pair. Diva can avoid $3.00 per pair of the normal variable cost on this sale, but Diva must pay a fixed cost of $4,000 to have the boots shipped. Diva has the capacity to produce this order, and no regular sales will be affected. What affect will occur on Diva’s profits if the order is accepted?

A.Profits will increase by $42,000.

B.Profits will increase by $49,000.

C.Profits will increase by $45,000.

D.More information is needed to answer.

111.Hurley Processors processes clay into two joint products—molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physical quantities method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$40.00

112.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the physicalquantities method is used to allocate the joint costs, how much will be allocated to each batch of craft blocks?

A.$1.20

B.$28.00

C.$8.75

D.$120.00

113.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, what is the total amount that will be allocated to each batch?

A.$55

B.$35

C.$160

D.None of these answer choices are correct.

114.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35. If the relative sales value method is used to allocate the joint costs, how much will be allocated to each batch of modeling foam?

A.$7.00

B.$8.75

C.$28.00

D.$15.00

115.Hurley Processors processes clay into two joint products, molding foam and craft blocks. When processed, each pound of clay yields 20 units of foam and 80 units of blocks. Foam sells for $2 per unit and blocks sells for $1.50 per unit. The total cost to process a 100-pound batch of clay is $35.If the relative sales value method is used to allocate the joint costs, how much will be allocated to craft blocks?

A.$8.75

B.$26.25

C.$28.00

D.$15.00

116.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. How much joint cost should be allocated to Product Ausing the relative sales value at split-off as the allocation method?

A.$600,000

B.$126,316

C.$400,000

D.$240,000

117.Soren Company makes two products from a joint input that have the following information:

Sales ValueTotal AdditionalSales Value

UnitsPer UnitProcessingPer Unit After

ProducedAt Split-OffCostsAdditional Processing

Product A              40,000              $10              $400,000              $15

Product B              150,000              4              300,000              7

The joint cost incurred to produce the two products to the split-off point is $600,000. Which product(s) should be processed further?

A.A

B.B

C.Neither A nor B

D.Both A and B

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