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Final QUIZ 2 COST Accounting AND

Control

BS Accountancy (Batangas State University)

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COST ACCOUNTING AND CONTROL

QUIZ 2 AY
2020-2021

MULTIPLE CHOICE:

1. The characteristic which is most often used to distinguish a product as either a joint product
or a by-product is the
A. Amount of labor used in processing the product.
B. Amount of separable product costs that are incurred in processing.
C. Amount (i.e., weight, inches, etc.) of the product produced in the manufacturing
process.
D. Relative sales value of the products produced in the process.
2. Which of the following components of production are allocable as joint costs when a single
manufacturing process produces several salable products?
A. Materials, labor and overhead
B. Materials and labor only
C. Labor and overhead only D. Overhead and materials only
3. Joint costs are used for:
A. Setting the selling price of a product.
B. Determining whether to continue producing an item.
C. Controlling costs
D. Determining inventory costs for accounting purposes
4. Which of the following statements about joint-cost allocation is false?
A. Joint-cost allocation is useful in deciding whether to further process a product after
splitoff.
B. Joint-cost allocation is useful in making a profit determination about individual
C. Joint-cost allocation is helpful in inventory valuation.
D. Joint-cost allocation can be based on the number of units produced.
5. The joint-cost allocation method that recognizes the revenues at split-off but does not
consider any further processing costs is the:
A. Relative-sales-value method
B. Net-realizable-value method
C. Physical-units method
D. Reciprocal-accounting method
6. For purposes of allocating joint costs to joint products using the relative sales value of
splitoff method, the costs beyond split-off.
A. Are allocated in the same manner as the joint costs.
B. Are deducted from the relative sales value at split-off.
C. Are deducted from the sales value at the point of sale.
D. Do not affect the allocation of the joint costs.
7. The method of pricing by products/scrap where no value is assigned to these items until
they are sold is known as the
A. Net realizable value at split-off point method.
B. Sales value at split-off method.
C. Realized value approach.
D. Approximated net realizable value at split-off method.

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8. All costs that are incurred between the split-off point and the point of sale are known as a.
Sunk costs
b. Split-off point
c. Transfer to finished goods inventory
d. Point of addition of disposal costs.
9. Which of the following is a commonly used joint cost allocation method?
A. High-low method
B. Regression analysis
C. Approximated sales value at split-off method
D. Weighted average quantity technique
10. The net realizable value approach mandates that the NRV of the by-product/scrap
betreated as
A. An increase in joint costs
B. A sunk cost
C. A reduction of joint costs
D. A cost that can be ignored totally.
11. Which of the following would not be considered a sunk cost?
A. Direct material cost
B. Direct labor cost
C. Joint cost
D. Building cost
12. The split-off point is the point at which
A. Output is first identifiable as individual products.
B. Joint costs are allocated to joint products..
C. Some products may first be sold.
D. All of the above.
13. Which of the following statements is true regarding by-products or scrap?
A. Process costing is the only method that should result in by-products or scrap.
B. Job order costing systems will never have by-products or scrap.
C. Job order costing systems may have instances where by-products or scrap result from
the production process.
D. Process costing will never have by-products or scrap from the production process.
14. By-products are
A. Allocated a portion of joint production cost.
B. Not sufficient alone, in terms of sales value, for management to justify undertaiinhg thre
joint process.
C. Also known as scrap.
D. The primary reason management undertook the production process.
15. Waste created by a production process is
A. Finished unit of product that has no sales value.
B. Residual of the production process that has limited sales value.
C. Residual of the production process that can be reworked for sale as an irregular unit of
product.
D. Discarded rather than sold.
16. Scrap is defined as a
A. Finished unitof product that has no sales value.
B. Residual of the production process that has limited sales value.

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C. Residual of the production process that can be reworked for sale as an irregular unit of
product.
D. Residual of the production process that has no sales value.
17. When allocating joint process cost based on tons of output, all products willA. Be salable
at split-off.
B. Have the same joint cost per ton.
C. Have a sales value greater than their costs.
D. Have no disposal costs at the split-off point.
18. Joint cost are most frequently allocated based upon relative
A. Profitability
B. Conversioncosts
C. Prime costs
D. Sales value
19. Each of the following is a method to allocate joint costs except
A. Relative sales value
B. Relative net realizable value
C. Relative weight, volume or linear measure
D. Average unit cost.
20. Which of the following components of production are allocable as joint costs when a
singlemanufacturing process produces several salable products?
A. Direct material,direct labor, and overhead
B. Direct material and direct labor only
C. Direct labor and overhead only
D. Overhead and direct material only
21. Joint costs are useful for
A. Setting the selling price of a product.
B. Determining whether to continue producing an item.
C. Evaluating management by means of a responsibility reporting system.
D. Determining inventory cost for accounting purposes.
22. Joint cost allocation is useful for
A. Decision making
B. Product costing
C. Control
D. evaluating managers’ performance
23. Joint costs are allocated to which of the following products??
By-products Scrap
A. Yes yes
B. Yes no
C. No no
D. No yes
24. Joint costs are allocated to joit products to
A. Obtain a cost per unit for financial statement purposes.
B. Provide accurate management information on production cost of each type of product
C. Compute variances from expected costs for each joint product
D. Allow the use of high-low analysis by the company.
25. If a company obtains two salable products from the refining of one are, the refining
processshould be accounted for as a(n)
A. Mixed cost process

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B. Joint process
C. Extractive process D. Reduction process.
26. A company manufactures products X and Y using a joint process. The joint processing
costsare P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000
respectively. After split-off product X is processed further at a cost of P5,000 and sold for
P21,000 whereas product Y is sold without further processing. If the company uses the net
realizable value method for allocating joint costs, the joint cost allocated to X is
A. P4,000
B. 5,000
C. 6,000
D. 6,667
12k /(12k + 8k)= .6 x 10k = 6k
27. Hovart Corporation, which manufactures two products out of a joint process-Compod
andUltrasene. The joint (common) costs incurred are P250,000 for a standard production
run that generates 120,000 gallons of Compod and 80,000 gallons of Ultrasene. Compod
sells for P2.00 per gallon while Ultrasene sells for P3,25 per gallon.
If there are no additional processing costs incurred after the split-off point, the amount of
joint cost of each production run allocated to Compod on a physical-quantity basis is
A. P100,000
B. 120,000k
C. 130,000
D. 150,000
120k / (120k + 80k) = .6 x 250k = 150k
28. Using the same information in No. 27 and if there are no additional processing costs
incurredafter the split-off point, the amount of joint cost of each production run allocated
to Ultrasene on a realizable value (gross market value) basis is
A. P100,000
B. 120,000
C. 130,000
D. 150,000
29. Using the same information in No. 27, and if additional processing costs beyond the split-
offpoint are P.10 per gallon for Compod and P1,10 per gallon for Ultrasene, the amount of
joint
cost of each production run allocated to Ultrasene on a physical quantity basis is
A. P100,000
B. 148,000 C. 142,500
D. 150,000
30. Using the same information in No. 27, and if additional processing costs beyond the split-
offpoint are P.10 per gallon for Compod and P1.10 per gallon for Ultrasene, the amount of
joint cost of each production run allocated to Compod on a net realizable value (net market
value) basis is
A. P100,000
B. 107,500 C. 142,500
D. 150,000

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