1.- A limitation of using the physical output method in allocating joint costs to joint products is that it treats low-value products that are large in size as if they were valuable. II.- Joint costs include direct materials, direct labor, and manufacturing overhead. * Only statement II is true O Only statement I is true Both statements are false O Both statements are true

1.- A limitation of using the physical output method in allocating joint costs to joint products is that it treats low-value products that are large in size as if they were valuable. II.- Joint costs include direct materials, direct labor, and manufacturing overhead. * Only statement II is true O Only statement I is true Both statements are false O Both statements are true

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For joint cost allocation: only the net realizable method can be used to allocate joint costs to by-products. only the relative sales value method can be used to allocate joint costs to scrap. separable costs do not include disposal costs. no joint costs are allocated to by-products or scrap. the most accurate method is the one using physical measures of output.
28. Which of the following best describes a Joint-Product? a) It is the expected loss in the efficient production of products. b) It is that part of the output of a process which produces one or more products which have relatively low sales values. c) It is that part of the output of a process where two or more products are produced which have substantial sales value to a business. d) It is what happens when production is less efficient than expected and the actual loss is greater than expected.
1.-Direct material, direct labour, and overhead costs incurred up to the initial split-off point are joint costs II.-The Physical output method/ Average unit cost method of allocating joint cost is simple but may not be accurate. Both statements are false Both statements are true O Only statement Il is true O Only statement I is true
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
Throughput costing • Treats all cost as period cost except for direct materials • Is very suitable for companies where labor and overaged are variable cost • Results in higher income than does variable costing when production exceeds sales • None of the above
The opportunity cost of making a component part in factory with excess capacity for which is no alternative use is: A. Zero B. Total production costs of the component C. Total variable cost of the component D. Fixed manufacturing costs of the component
Organizations are motivated to use multiple indirect cost pools instead of a single indirect cost pool when Select one: O a. Multiple Indirect cost pools are needed to conform to external reporting requirements b. manufacturing overhead costs are difficult to control c. the cost drivers for the multiple indirect cost pools are different from the cost driver of the single indirect cost pool d. none of the options
Direct materials are considered as product costs. * True False Can be true, can be false I don't have an idea
Conversion Costs are composed of direct labor and overhead. * True False Can be true, can be false I don't have an idea
Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity? O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume- based system. O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABC system. O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-based system. O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-based system will not. e to search W 11:35 A D A dx ENG 22-05-2021 hp 141 brt se delete home end 96 - backspace num ask lock T 7V 8A 94 home Dg up K enter 5 0 pause ↑ shift 11 end alt ctrl SUt
Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.
What is the key difference between Absorption Costing and Marginal Costing? A Absorption Costing treats Manufacturing Overhead as a period cost. B Marginal Costing treats Fixed Manufacturing Overhead as a period cost. C Absorption Costing only considers variable costs to calculate net income. D Marginal Costing only considers variable costs to calculate net income.