When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to Mr. DirtOut and Mr. SinkClean

ACCOUNTING

Multiple Choice

The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. The following material was collected for the month of January. There was no beginning inventory.


Direct materials processed: 250,000 gallons (242,500 gallons of good product)


Production: Mr. DirtOut 147,500 gallons

Mr. SinkClean 95,000 gallons


Sales: Mr. DirtOut 140,500 at $110 per gallon

Mr. SinkClean 91,000 at $ 100 per gallon


The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $380,000.


When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to Mr. DirtOut and Mr. SinkClean?

a. $231,116 and $148,884

b. $224,200 and $155,800

c. $227,202 and $152,798

d. $230,626 and $149,374

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What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively

ACCOUNTING

Multiple Choice

The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. The following material was collected for the month of January. There was no beginning inventory.



Direct materials processed: 250,000 gallons (242,500 gallons of good product)


Production: Mr. DirtOut 147,500 gallons

Mr. SinkClean 95,000 gallons



Sales: Mr. DirtOut 140,500 at $110 per gallon

Mr. SinkClean 91,000 at $ 100 per gallon


The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $380,000.


What are the physical-volume proportions to allocate joint costs for Mr. DirtOut and Mr. SinkClean, respectively?

a. 59.00% and 41.00%

b. 60.82% and 39.18%

c. 39.18% and 60.82%

d. 59.79% and 40.21%

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A reason why a physical-measure to allocate joint costs is less preferred than the sales value at splitoff is

ACCOUNTING

Multiple Choice

A reason why a physical-measure to allocate joint costs is less preferred than the sales value at splitoff is

a. a physical measure such as volume is difficult to estimate because of shrinkage.

b. physical volume usually has little relationship to the revenue producing power of products.

c. a physical measure usually results in the costs being allocated to the product that weighs the most.

d. all of the above are reasons why the sales value at splitoff method is preferred to a physical volume measure.

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Product X is sold for $8 a unit and Product Y is sold for $12 a unit

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Multiple Choice

Product X is sold for $8 a unit and Product Y is sold for $12 a unit. Each product can also be sold at the splitoff point. Product X can be sold for $5 and Product Y for $4. Joint costs for the two products totaled $4,000 for January for 600 units of X and 500 units of Y. What are the respective joint costs assigned each unit of products X and Y if the sales value at splitoff method is used?

a. $2.96 and $4.44

b. $4.00 and $4.55

c. $4.00 and $3.20

d. $4.55 and $4.55

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The Arvid Corporation manufactures widgets, gizmos, and turnbols from a joint process

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Multiple Choice

The Arvid Corporation manufactures widgets, gizmos, and turnbols from a joint process. May production is 4,000 widgets; 7,000 gizmos; and 8,000 turnbols. Respective per unit selling prices at splitoff are $15, $10, and $5. Joint costs up to the splitoff point are $75,000. If joint costs are allocated based upon the sales value at splitoff, what amount of joint costs will be allocated to the widgets?

a. $30,882

b. $26,471

c. $17,647

d. $28,125

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Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff point where two products (paper and pencil casings) are

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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 are the paper's and the pencils' approximate weighted cost proportions using the sales value at splitoff method, respectively?

a. 50.00% and 50.00%

b. 33.33% and 66.67%

c. 31.82% and 68.18%

d. none of the above

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If the sales value at splitoff method is used, what is the approximate production cost for each pencil casing

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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 is the approximate production cost for each pencil casing?

a. $0.0250

b. $0.0255

c. $0.0335

d. $0.0357

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