If the sales value at splitoff method is used, what are the approximate joint costs assigned to ending inventory for paper

ACCOUNTING

Multiple Choice

Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of November:


Trees processed: 50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)



Production: paper 30,000 sheets

pencil casings 30,000



Sales: paper 29,000 at $0.04 per page

pencil casings 30,000 at $0.10 per casing


Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.



Yakima’s accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.


If the sales value at splitoff method is used, what are the approximate joint costs assigned to ending inventory for paper?

a. $14.29

b. $50.00

c. $435.00

d. $750.00

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What is the sales value at the splitoff point of the pencil casings

ACCOUNTING

Multiple Choice

Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of November:


Trees processed: 50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)



Production: paper 30,000 sheets

pencil casings 30,000



Sales: paper 29,000 at $0.04 per page

pencil casings 30,000 at $0.10 per casing


Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.



Yakima’s accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.


What is the sales value at the splitoff point of the pencil casings?

a. $300

b. $1,480

c. $3,000

d. $3,750

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What is the sales value at the splitoff point for paper

ACCOUNTING

Multiple Choice

Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of November:


Trees processed: 50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)



Production: paper 30,000 sheets

pencil casings 30,000



Sales: paper 29,000 at $0.04 per page

pencil casings 30,000 at $0.10 per casing


Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.



Yakima’s accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.


What is the sales value at the splitoff point for paper?

a. $120

b. $1,160

c. $1,200

d. $1,950

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The benefits-received criteria for allocating joint costs indicates market-based measures are preferred because

ACCOUNTING

Multiple Choice

The benefits-received criteria for allocating joint costs indicates market-based measures are preferred because

a. physical measures such as volume are a clearer basis for allocating cost than other measures.

b. other measures are more difficult to calculate.

c. revenues are usually the best indicator of the benefits received.

d. of none of the above.

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Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products

ACCOUNTING

Multiple Choice

Which of the following statements is true in regard to the cause-and-effect relationship between allocated joint costs and individual products?

a. A high individual product value results in a high level of joint costs.

b. A low individual product value results in a low level of joint costs.

c. A high individual product value results in a low level of joint costs.

d. There is no cause-and-effect relationship.

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An example of a market-based approach to allocating joint costs is (are) allocating joint costs based on

ACCOUNTING

Multiple Choice

An example of a market-based approach to allocating joint costs is (are) allocating joint costs based on

a. sales value at splitoff method.

b. physical volume.

c. constant gross-margin percentage method.

d. both (a) and (c).

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All of the following methods may be used to allocate joint costs EXCEPT

ACCOUNTING

Multiple Choice

All of the following methods may be used to allocate joint costs EXCEPT

a. the constant gross-margin percentage method.

b. the estimated net realizable value method.

c. the present value allocation method.

d. the sales value at splitoff method

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