Which line of the following schedule is incorrect?
Detailed Answer
Correct answer: (D)
Term: Uncontrollable cost
Definition: Is eliminated with a segment discontinuance.
2
The PeeDee Gravel Company produces 4 grades of gravel: Decorative, Basic, Foundation, and Pea. From 10 tons of raw materials, the company produces 5 tons of Decorative, 3 tons of Basic, 1 ton of Foundation, and 1 ton of Pea gravel grades. The cost of raw material is $12.00 per ton. On a physical basis, how much of the cost of 90 tons of raw materials should be allocated to the Pea gravel grade?
Detailed Answer
Correct answer: (B)
$ 108
3
The selling price of a joint product is $12,000. The total selling price of all of the joint products is $60,000. Total cost for all the joint products is $36,000. The gross profit rate on the joint product, based on an allocation of joint costs on a value basis, is:
Detailed Answer
Correct answer: (B)
40.0%
4
Which of the following statements best define split off point in joint costing?
Detailed Answer
Correct answer: (C)
It is the juncture in a joint production process when two or more products become separately identifiable.
5
Which of the following statements best define joint products?
Detailed Answer
Correct answer: (D)
When a joint production process yields two or more products with high total sales values relative to total sales values of other products, those products are called joint products.
6
The products of a joint production process that have low total sales value compared with the total sales value of the main product are called __________.
Detailed Answer
Correct answer: (C)
byproducts
7
__________ is the differentiating factor while classifying a product as a main product or byproduct.
Detailed Answer
Correct answer: (C)
Percentage of total sales value
8
In joint costing, which of the following changes may lead to a change in product classification?
Detailed Answer
Correct answer: (C)
main product becomes technologically obsolete
9
Products with a relatively low sales value are known as _________.
Detailed Answer
Correct answer: (D)
byproducts
10
Which of the following statements is true of main products and byproducts?
Detailed Answer
Correct answer: (C)
Product classifications may change over time.