ACCT 431 TEST & EXAM 3 UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. Which of the following statements best define split off
point in joint costing?
A. It is the point at which managers decide to discontinue
one or more of the products
B. It is the juncture at which decisions determining joint
costs of various products to be produced are taken
C. It is the juncture in a joint production process when
two or more products become separately identifiable
D. It is the point at which the managers decide to
outsource some of its production processes
Answer:
C. It is the juncture in a joint production process when two or more products
become separately identifiable
Question:
2. Which of the following statements is true of joint
production process and its components?
A. Decisions relating to the sale or further processing of
each identifiable product can be made independently of
decisions about the other products beyond the split-off
point.
B. The primary purpose of joint costing is to allocate the
separable costs to the individual products that are
eventually sold.
C. Distribution costs incurred beyond the split-off point
assignable to each of the specific products identified at
the split-off point are considered as joint costs.
D. When a joint production process yields two or more
products with low total sales values relative to the total
sales values of other products, those products are called
joint products.
Answer:
A. Decisions relating to the sale or further processing of each identifiable product
can be made independently of decisions about the other products beyond the
split-off point.
,Question:
3. Which of the following statements is true of joint costing?
A. The primary purpose of joint costing is to allocate the
separable costs to the individual products that are
eventually sold.
B. The costs of a production process that yields multiple
products simultaneously are called joint costs.
C. Distribution costs incurred beyond the split-off point
that are assignable to each of the specific products
identified at the split-off point are considered as joint
costs.
D. Joint costing is less useful for companies which
manufacture multiple products simultaneously from the
same production process
Answer:
B. The costs of a production process that yields multiple products simultaneously
are called joint costs.
Question:
4. When a single manufacturing process yields two
products, one of which has a relatively high sales value
compared to the other, the two products are respectively
known as:
A. joint products and scrap
B. main products and joint products
C. joint products and byproducts
D. main products and byproducts
Answer:
D. main products and byproducts
Question:
5. Which of the following factors would guide you in
classifying a product as a main product or byproduct?
A. Percentage of total sales value
B. Joint costs incurred up to the split-off point
C. Number of units per processing period
D. Weight or volume of outputs per period
Answer:
A. Percentage of total sales value
,Question:
6. In joint costing, which of the following changes may lead
to a change in product classification?
A. main product sales price increases due to a new
application
B. main product becomes technologically obsolete and
it's market value falls significantly
C. byproduct sales price decreases due to a new
government regulation
D. byproduct losses value due to a competing products
Answer:
B. main product becomes technologically obsolete and it's market value falls
significantly
Question:
7. Which of the following would not be a GAAP or
managerial accounting reason for allocating joint costs?
A. to avoid generating "negative" revenue when disposal
costs are considered
B. to analyze the profitability of various divisions
C. to calculate cost of goods sold
D. for reimbursement of costs under a federal contract
Answer:
A. to avoid generating "negative" revenue when disposal costs are considered
Question:
8. Which of the following statements is true of the methods
for allocating joint costs?
A. Constant gross-margin percentage method results in
same joint production cost per unit for all products.
B. Estimated net realizable value method results in same
gross margin percentage for all products.
C. Present value allocation method is the least preferred
method due to its complex calculations.
D. Sales value at split-off method uses the sales value of
the entire production of the accounting period to
allocate costs.
Answer:
D. Sales value at split-off method uses the sales value of the entire production of
the accounting period to allocate costs.
, Question:
9. Which of the following is a market-based approach to
allocating joint costs?
A. physical measures
B. units of production
C. net realizable value
D. sales units
Answer:
C. net realizable value
Question:
10. Which of the following statements is true of the methods
for allocating joint costs?
A. The sales value at split-off method always results in the
same gross-margin percentage for all products.
B. The net realizable value method uses the sales value of
the units sold during the accounting period to allocate
joint costs.
C. The sales value at split-off method allocates joint costs
to each product in proportion to the sales value of total
production.
D. The net realizable value method results in the same
joint production cost per unit for all products.
Answer:
C. The sales value at split-off method allocates joint costs to each product in
proportion to the sales value of total production.
Question:
11. How does the net realizable value method allocate joint
costs?
A. allocates joint costs to joint products in a way that
each product has an identical gross-margin percentage
B. allocates joint costs to joint products on the basis of
relative NRV
C. allocates joint costs to joint products on the basis of a
comparable physical measure at the split-off point
D. allocates joint costs to joint products on the basis of
the relative sales value at the split-off point
Answer:
B. allocates joint costs to joint products on the basis of relative NRV
QUESTIONS AND CORRECT ANSWERS
Question:
1. Which of the following statements best define split off
point in joint costing?
A. It is the point at which managers decide to discontinue
one or more of the products
B. It is the juncture at which decisions determining joint
costs of various products to be produced are taken
C. It is the juncture in a joint production process when
two or more products become separately identifiable
D. It is the point at which the managers decide to
outsource some of its production processes
Answer:
C. It is the juncture in a joint production process when two or more products
become separately identifiable
Question:
2. Which of the following statements is true of joint
production process and its components?
A. Decisions relating to the sale or further processing of
each identifiable product can be made independently of
decisions about the other products beyond the split-off
point.
B. The primary purpose of joint costing is to allocate the
separable costs to the individual products that are
eventually sold.
C. Distribution costs incurred beyond the split-off point
assignable to each of the specific products identified at
the split-off point are considered as joint costs.
D. When a joint production process yields two or more
products with low total sales values relative to the total
sales values of other products, those products are called
joint products.
Answer:
A. Decisions relating to the sale or further processing of each identifiable product
can be made independently of decisions about the other products beyond the
split-off point.
,Question:
3. Which of the following statements is true of joint costing?
A. The primary purpose of joint costing is to allocate the
separable costs to the individual products that are
eventually sold.
B. The costs of a production process that yields multiple
products simultaneously are called joint costs.
C. Distribution costs incurred beyond the split-off point
that are assignable to each of the specific products
identified at the split-off point are considered as joint
costs.
D. Joint costing is less useful for companies which
manufacture multiple products simultaneously from the
same production process
Answer:
B. The costs of a production process that yields multiple products simultaneously
are called joint costs.
Question:
4. When a single manufacturing process yields two
products, one of which has a relatively high sales value
compared to the other, the two products are respectively
known as:
A. joint products and scrap
B. main products and joint products
C. joint products and byproducts
D. main products and byproducts
Answer:
D. main products and byproducts
Question:
5. Which of the following factors would guide you in
classifying a product as a main product or byproduct?
A. Percentage of total sales value
B. Joint costs incurred up to the split-off point
C. Number of units per processing period
D. Weight or volume of outputs per period
Answer:
A. Percentage of total sales value
,Question:
6. In joint costing, which of the following changes may lead
to a change in product classification?
A. main product sales price increases due to a new
application
B. main product becomes technologically obsolete and
it's market value falls significantly
C. byproduct sales price decreases due to a new
government regulation
D. byproduct losses value due to a competing products
Answer:
B. main product becomes technologically obsolete and it's market value falls
significantly
Question:
7. Which of the following would not be a GAAP or
managerial accounting reason for allocating joint costs?
A. to avoid generating "negative" revenue when disposal
costs are considered
B. to analyze the profitability of various divisions
C. to calculate cost of goods sold
D. for reimbursement of costs under a federal contract
Answer:
A. to avoid generating "negative" revenue when disposal costs are considered
Question:
8. Which of the following statements is true of the methods
for allocating joint costs?
A. Constant gross-margin percentage method results in
same joint production cost per unit for all products.
B. Estimated net realizable value method results in same
gross margin percentage for all products.
C. Present value allocation method is the least preferred
method due to its complex calculations.
D. Sales value at split-off method uses the sales value of
the entire production of the accounting period to
allocate costs.
Answer:
D. Sales value at split-off method uses the sales value of the entire production of
the accounting period to allocate costs.
, Question:
9. Which of the following is a market-based approach to
allocating joint costs?
A. physical measures
B. units of production
C. net realizable value
D. sales units
Answer:
C. net realizable value
Question:
10. Which of the following statements is true of the methods
for allocating joint costs?
A. The sales value at split-off method always results in the
same gross-margin percentage for all products.
B. The net realizable value method uses the sales value of
the units sold during the accounting period to allocate
joint costs.
C. The sales value at split-off method allocates joint costs
to each product in proportion to the sales value of total
production.
D. The net realizable value method results in the same
joint production cost per unit for all products.
Answer:
C. The sales value at split-off method allocates joint costs to each product in
proportion to the sales value of total production.
Question:
11. How does the net realizable value method allocate joint
costs?
A. allocates joint costs to joint products in a way that
each product has an identical gross-margin percentage
B. allocates joint costs to joint products on the basis of
relative NRV
C. allocates joint costs to joint products on the basis of a
comparable physical measure at the split-off point
D. allocates joint costs to joint products on the basis of
the relative sales value at the split-off point
Answer:
B. allocates joint costs to joint products on the basis of relative NRV
