361 Chapter 11 MC Solutions (Handmade).docx

Chapter 11 -- Allocation of Joint Costs and Accounting for By-Products TRUE/FALSE 1. Joint costs occur after the split-off point ina production process ANS: F DIF: Easy OBJ: 11-1 2. Joint costs occur before the split-off point ina production process ANS: T DIF: Easy OBJ: 11- 1 3. Joint costs are allocated to by-products as well as primary products. ANS: F DIF: Easy OBJ: 11-1 4. The primary distinction between by-products and scrap is the difference in sales value. ANS: T DIF: Easy OBJ: 11-1 5. The primary distinction between by-products and scrap is the difference in volume produced. ANS: F DIF: Easy OBJ: 11-1 6. The point at which individual products are first identifiable ina joint process is referred to as the splitoff point ANS: T DIF: Easy OBJ: 11-2 7. Joint costs include all materials, labor and overhead that are incurred before the split-off point. ANS: T DIF: Easy OBJ: 11-1 8. Two methods of allocating joint costs to products are physical measure allocation and ary allocation. ANS: T DIF: Easy OBJ: 11-4 decision that must be made at split-off is to sell a product or process it further. ANS: T DIF: Easy OBJ: 11-3 10. Allocating joint costs based upon a physical measure ignores the revenue-generating ability of individual products. ANS: T DIF: Moderate OBJ: 11-4 11. Allocating joint costs based upon a physical measure considers the revenue-generating ability of individual products. ANS: F DIF: Moderate OBJ: 11-4 153 12. ary allocation measures recognize the revenue generating ability of each product ina joint process. ANS: T DIF: Moderate OBJ: 11-4 13. The relative sales value method requires mon physical unit for measuring the output of each product. ANS: F DIF: Easy OBJ: 11-4 14. Joint costs are allocated to main products, but not to by-products ANS: T DIF: Easy OBJ: 11- 5 15. Net realizable value equals product sales revenue at split-off plus any costs necessary to prepare and dispose of the product. ANS: F DIF: Moderate OBJ: 11-4 16. Net realizable val