Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 7, Problem 26E
Refer to Exercise 7.25 and allocate the joint costs using the sales-value-at-split-off method.
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Students have asked these similar questions
V4. Give two limitations of the physical measure method of a joint -cost allocation.
Distinguish between the sales volume at split off method and the NRV method.
Which of the following choices correctly denotes the data needed to allocate joint costs under the relative-sales-value method?
Sales Value of Product at Split-Off
Separable Cost
Sales Value of Product After Processing Beyond Split-Off
A.
Yes
Yes
No
B.
Yes
Yes
Yes
C.
Yes
No
No
D.
No
Yes
Yes
E.
No
No
Yes
Choice A
Choice D
Choice C
Choice B
Choice E
The following are approaches in allocating joint costs incurred up to split off point, except:
a. Sales value method
b. Physical unit method
c. Fifo method
d. Weighted average method
Chapter 7 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 7 - Describe the two-stage allocation process for...Ch. 7 - Why must support service costs be assigned to...Ch. 7 - Explain how allocation of support service costs is...Ch. 7 - Prob. 4DQCh. 7 - Explain how allocating support service costs will...Ch. 7 - Prob. 6DQCh. 7 - Explain why it is better to allocate budgeted...Ch. 7 - Why is it desirable to allocate variable costs and...Ch. 7 - Explain why either normal or peak capacity of the...Ch. 7 - Explain why variable bases should not be used to...
Ch. 7 - Prob. 11DQCh. 7 - Explain the difference between the direct method...Ch. 7 - The reciprocal method of allocation is more...Ch. 7 - What is a joint cost? How does it relate to...Ch. 7 - How do joint costs differ from other common costs?Ch. 7 - The expected costs for the Maintenance Department...Ch. 7 - Prob. 2CECh. 7 - Valron Company has two support departments, Human...Ch. 7 - Refer to Cornerstone Exercise 7.3. Now assume that...Ch. 7 - Refer to Cornerstone Exercise 7.3. Now assume that...Ch. 7 - Refer to Cornerstone Exercise 7.3 and solve for...Ch. 7 - Orchard Fresh, Inc., purchases apples from local...Ch. 7 - Refer to Cornerstone Exercise 7.7. Assume that...Ch. 7 - Refer to Cornerstone Exercise 7.7. Assume that...Ch. 7 - A company manufactures three products, L-Ten,...Ch. 7 - Refer to Cornerstone Exercise 7.10. (Round...Ch. 7 - Classify each of the following departments in a...Ch. 7 - Prob. 13ECh. 7 - Identify some possible causal factors for the...Ch. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Kumar, Inc., evaluates managers of producing...Ch. 7 - Refer to the data in Exercise 7.18. When the...Ch. 7 - Jasmine Company manufactures both pesticide and...Ch. 7 - Refer to the data in Exercise 7.20. The company...Ch. 7 - Eilers Company has two producing departments and...Ch. 7 - Refer to the data in Exercise 7.22. The company...Ch. 7 - Refer to the data in Exercise 7.22. The support...Ch. 7 - Alomar Company manufactures four products from a...Ch. 7 - Refer to Exercise 7.25 and allocate the joint...Ch. 7 - Pacheco, Inc., produces two products, overs and...Ch. 7 - Minor Co. has a job order cost system and applies...Ch. 7 - A CPA would recommend changing from plantwide...Ch. 7 - A company uses charging rates to allocate service...Ch. 7 - Chester Company provided information on overhead...Ch. 7 - Which of the following statements is true? a. The...Ch. 7 - Biotechtron, Inc., has two research laboratories...Ch. 7 - AirBorne is a small airline operating out of...Ch. 7 - Duweynie Pottery, Inc., is divided into two...Ch. 7 - Macalister Corporation is developing departmental...Ch. 7 - Prob. 37PCh. 7 - Welcome Inns is a chain of motels serving business...Ch. 7 - Sonimad Sawmill, Inc. (SSI), purchases logs from...Ch. 7 - Prob. 40P
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- Which of the following methods allocates joint costs based on the potential market value at the point where the products will be separated to be processed further? a.net realizable value method b.weighted average method c.market value at split-off method d.physical units methodarrow_forwardWhich of the following is the most commonly used method for assignment of joint costs? a. Relative sales value b. Split-off method c. Average production cost d. Relative percentage of direct costs basisarrow_forwardIn a cost-volume-profit (CVP) graph, the intersection of the total sales line and the total expense line represents which of the following? Multiple Choice The break-even point The total fixed expenses The total variable expenses The total contribution marginarrow_forward
- When management believes that there is a direct link between the joint costs incurred and the value of products before further processing takes place, the _____ is the best alternative to allocating joint costs. A.physical measures methodB.NRV methodC.sales value at splitoff methodD.constant grossmargin percentage methodarrow_forwardCost accountingarrow_forward1. Which of the following is TRUE about contribution margin? Select one: A. The amount remaining after cost of goods sold has been deducted from sales revenues. B. The amount remaining fixed costs have been deducted from sales revenue. C. The amount remaining after fixed costs have been deducted from variable costs. D. The amount remaining after variable costs have been deducted from sales revenue. 2. Which of the following financial statements reports information as of a specific date? Select one: A. Statement of Changes in Equity. B. Statement of Profit or Loss and other Comprehensive Income. C. Statement of Cash Flows. D. Statement of Financial Position. 3. The following are objectives of budgeting EXCEPT: Select one: A. Compare organisational actual achievement with planned goals. B. Ensuring departments within an organisation operate as a team. C. Establishing and communicating organisational goals. D. Developing appropriate high technology information system for an…arrow_forward
- Contribution margin is a.the same as sales revenue b.the excess of sales over variable costs c.another term for volume in the "cost-volume-profit" analysis d.profitarrow_forwardWhy is the constant gross-margin percentage NRV method sometimes called a “joint-cost allocation and a profit-allocation” method?arrow_forwardOn a CVP graph, the intersection of the sales revenue line and the total cost line is known as the: a. margin of safety point b. total cost point c. breakeven point d. unit contribution marginarrow_forward
- .Which of the following is the format of the income statement that is MOST useful in decision-making? Select one: A.Contribution margin format B.Absorption costing format C.Single-step format D.Multiple-step formatarrow_forward1. Distinguish between variable and fixed costs both on a per unit and total basis (graphs may be used to assist in explanation). 2. Identify any three (3) basic assumptions of CVP Analysis. 3. Briefly explain the term sales mix.arrow_forwardThe difference between sales and marginal cost is______________ a. Fixed Cost b. Profit c. Sales price d. Contributionarrow_forward
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