Quiz 2 - Spoiled and Joint / By Products

Due May 13 at 18:00 Points 50 Questions 40

Available May 13 at 18:00 - May 13 at 21:00 about 3 hours Time Limit 180 Minutes

Instructions
This quiz covers topics of Process Costing - FIFO and Average and have a total of 50 points. It has 15 T/F
questions, 15 MC questions and 10 MC problem solving (2 pts each). Since this is an online quiz, you can open
your notes while taking the quiz and even use excel file in the computation.

No partial points will be given since this is open-notes and there are no solutions required.

Attempt History
Attempt Time Score
LATEST Attempt 1 56 minutes 47 out of 50

 Correct answers will be available on May 14 at 0:00.

Score for this quiz: 47 out of 50

Submitted May 13 at 18:56
This attempt took 56 minutes.

Question 1 1 / 1 pts

An item classified as spoilage has no value

True

False

Question 2 1 / 1 pts

Reworked goods are unacceptable units of production usually NOT capable of

being repaired or converted into a salable product.
 True

False

Question 3 1 / 1 pts

Rework is finished production that is NOT in accordance with customer desires.

The product is redone and sold as finished goods.

True

False

Question 4 1 / 1 pts

Scrap is residual material that results from manufacturing a product. and can have
either a high or low sales value relative to the product with which it is associated.

True

False

Question 5 1 / 1 pts

Scrap and rework are considered to be the same thing by managerial accountants.

True

False
Question 6 1 / 1 pts

The costs of normal spoilage are typically included as a component of the costs of
good units manufactured

True

False

Question 7 1 / 1 pts

Abnormal spoilage is spoilage inherent in a particular production process.

True

False

Question 8 1 / 1 pts

Normal spoilage rates are computed by dividing units of normal spoilage by total
good units completed, NOT total actual units started in production.

True

False

Question 9 1 / 1 pts

Joint costs are the costs of a production process that yields multiple products
simultaneously
 True

False

Question 10 1 / 1 pts

Separable costs are incurred beyond the splitoff point that are assignable to each
of the specific products identified at the splitoff point.

True

False

Question 11 1 / 1 pts

All products yielded from joint product processing have some positive value to the
firm

True

False

Question 12 1 / 1 pts

The juncture in a joint production process when two products become separable is
the byproduct point.

True

False
Question 13 1 / 1 pts

Separable costs include manufacturing costs only.

True

False

Question 14 1 / 1 pts

The products of a joint production process that have low total sales values
compared with the total sales value of the main product are called joint products.

True

False

Question 15 1 / 1 pts

The products of a joint production process that have low total sales values
compared with the total sales value of the main product or of joint products are
called byproducts.

True

False

Question 16 1 / 1 pts
Managers often cite reductions in the costs of spoilage as a(n):

major justification for implementing a just-in-time production system

immaterial item that is not to be tracked

indication of improvement in the accounting system

measurement of improved output quality

Question 17 1 / 1 pts

Unacceptable units of production that are discarded or sold for reduced prices are
referred to as:

spoilage

defective units

scrap

reworked units

Question 18 1 / 1 pts

A production process which involves spoilage and rework occurs in:

the manufacture of high precision tools

semiconductor units

the manufacture of clothing

 All of these answers are correct.

Question 19 1 / 1 pts

Unacceptable units of production that are subsequently repaired and sold as

acceptable finished goods are:

defective units

reworked units

scrap

spoilage

Question 20 1 / 1 pts

Costs of poor quality production include the:

opportunity cost of the plant and workers

effect on potential customers

effect on current customers

All of these answers are correct

Question 21 1 / 1 pts

Spoilage that is an inherent result of the particular production process and arises
under efficient operating conditions is referred to as:
 ordinary spoilage

abnormal spoilage

normal spoilage

None of these answers is correct.

Question 22 1 / 1 pts

Spoilage that should NOT arise under efficient operating conditions is referred to
as

abnormal spoilage

None of these answers is correct.

ordinary spoilage

normal spoilage

Question 23 1 / 1 pts

Costs of normal spoilage are usually accounted for as:

a separate line item in the income statement

) part of the cost of goods sold

an asset in the balance sheet

part of the cost of goods manufactured

 Question 24 1 / 1 pts

Normal spoilage should be computed using as the base the

total actual units started into production

None of these answers is correct

total units completed

total good units completed

Incorrect Question 25 0 / 1 pts

What type of cost is the result of an event that results in more than one product or
service simultaneously?

joint costs

main costs

byproduct cost

separable costs

Question 26 1 / 1 pts

1. The ________ point is the juncture in a joint production process when two or
more products become separately identifiable.

joint product

process
 splitoff

end

Question 27 1 / 1 pts

All costs incurred beyond the splitoff point that are assignable to one or more
individual products are called:

main costs

separable costs

joint costs

byproduct costs

Question 28 1 / 1 pts

The focus of joint costing is on allocating costs to individual

products:

after the splitoff point

before the splitoff point

at the splitoff point

at the end of production

Question 29 1 / 1 pts
Which of the following methods of allocating costs use market-based data?

The constant gross-margin percentage method

Sales value at splitoff method

All of these answers are correct.

Estimated net realizable value method

Question 30 1 / 1 pts

Products with a relatively low sales value are known as

scrap

byproducts

main products

joint products

Question 31 2 / 2 pts

Craft Concept manufactures small tables in its Processing Department. Direct

materials are added at the initiation of the production cycle and must be bundled in
single kits for each unit. Conversion costs are incurred evenly throughout the
production cycle. Before inspection, some units are spoiled due to nondetectible
materials defects. Inspection occurs when units are 50% converted. Spoiled units
generally constitute 5% of the good units. Data for December 2012 are as follows:

WIP, beginning inventory 12/1/2012 Direct materials (100% complete)

20,000 units
Conversion costs (75% complete)

Started during December 80,000 units

Completed and transferred out 12/31/2012 76,800 units

WIP, ending inventory 12/31/2012 16,000 units

Direct materials (100% complete) Conversion costs (65% complete)

Costs for December:

WIP, beginning Inventory:

Direct materials P100,000

Conversion costs 60,000

Direct materials added 200,000

Conversion costs added 280,000

Required:

What is the number of total spoiled units?

7.002

7.020

7,200

2.700

Question 32 2 / 2 pts

Craft Concept manufactures small tables in its Processing Department. Direct

materials are added at the initiation of the production cycle and must be bundled in
single kits for each unit. Conversion costs are incurred evenly throughout the
production cycle. Before inspection, some units are spoiled due to nondetectible
materials defects. Inspection occurs when units are 50% converted. Spoiled units
generally constitute 5% of the good units. Data for December 2012 are as follows:
WIP, beginning inventory 12/1/2012 Direct materials (100% complete)

20,000 units

Conversion costs (75% complete)

Started during December 80,000 units

Completed and transferred out 12/31/2012 76,800 units

WIP, ending inventory 12/31/2012 16,000 units

Direct materials (100% complete) Conversion costs (65% complete)

Costs for December:

WIP, beginning Inventory:

Direct materials P100,000

Conversion costs 60,000

Direct materials added 200,000

Conversion costs added 280,000

Calculate the Equivalent Units of Production - Materials?

3.480

3,408

3.840

3.804

Question 33 2 / 2 pts

Yakima Manufacturing purchases trees from Cheney Lumber and processes them
up to the splitoff point where two products (paper and pencil casings) are obtained.
The products are then sold to an independent company that markets and
distributes them to retail outlets. The following information was collected for the
month of November:

Trees processed: 100 trees (yield is 60,000 sheets of paper and 60,000 pencil
casings and no scrap)

Production: paper 60,000 sheets

pencil casings 60,000

Sales: paper 58,000 at P0.04 per page pencil casings 60,000 at

P0.10 per casing

The cost of purchasing 100 trees and processing them up to the splitoff point to
yield 60,000 sheets of paper and 60,000 pencil casings is P3,000.

Yakima's accounting department reported no beginning inventories and an ending

inventory of 2,000 sheets of paper.

What is the sales value at the splitoff point for paper?

2,400

6,000

2,320

Question 34 2 / 2 pts

Yakima Manufacturing purchases trees from Cheney Lumber and processes them
up to the splitoff point where two products (paper and pencil casings) are obtained.
The products are then sold to an independent company that markets and
distributes them to retail outlets. The following information was collected for the
month of November:
Trees processed: 100 trees (yield is 60,000 sheets of paper and 60,000 pencil
casings and no scrap)

Production: paper 60,000 sheets

pencil casings 60,000

Sales: paper 58,000 at P0.04 per page pencil casings 60,000 at

P0.10 per casing

The cost of purchasing 100 trees and processing them up to the splitoff point to
yield 60,000 sheets of paper and 60,000 pencil casings is P3,000.

Yakima's accounting department reported no beginning inventories and an ending

inventory of 2,000 sheets of paper.

What is the sales value at the splitoff point of the pencil casings?

6,000

2,320

2,400

Question 35 2 / 2 pts

Yakima Manufacturing purchases trees from Cheney Lumber and processes them
up to the splitoff point where two products (paper and pencil casings) are obtained.
The products are then sold to an independent company that markets and
distributes them to retail outlets. The following information was collected for the
month of May:

Trees processed: 100 trees (yield is 70,000 sheets of paper and 60,000 pencil
casings and no scrap)

Production: paper 70,000 sheets, pencil casings 60,000

Sales: paper 68,000 at P0.04 per page, paper casings 60,000 at
P0.10 per casing

The cost of purchasing 100 trees and processing them up to the splitoff point to
yield 70,000 sheets of paper and 60,000 pencil casings is $3,000.

Yakima's Manufacturing's accounting department reported no beginning

inventories and an ending inventory of 2,000 sheets of paper.

What are the paper's and the pencils' approximate weighted cost proportions using
the sales value at splitoff method, respectively?

None of these answers is correct.

33.33% and 66.67%

50.00% and 50.00%

31.82% and 68.18%

Question 36 2 / 2 pts

The Arvid Corporation manufactures widgets, gizmos, and turnbols from a joint
process. May production is 2,000 widgets; 3,500 gizmos; and 4,000 turnbols.
Respective per unit selling prices at splitoff are P30, P20, and P10. Joint costs up
to the splitoff point are P75,000. If joint costs are allocated based upon the sales
value at splitoff, what amount of joint costs will be allocated to the widgets?

P26,471

P28,125

P17,647

P30,882

Question 37 2 / 2 pts
 Product X is sold for $32 a unit and Product Y is sold for P48 a unit. Each product
can also be sold at the splitoff point. Product X can be sold for P10 and Product Y
for P8. Joint costs for the two products totaled P2,000 for January for 300 units of
X and 250 units of Y. What are the respective joint costs assigned each unit of
products X and Y if the sales value at splitoff method is used?

P4.55 and P4.55

P2.96 and P4.44

P4.00 and P4.55

P4.00 and P3.20

Incorrect Question 38 0 / 2 pts

A reason why a physical-measure to allocate joint costs is less preferred than the
sales value at splitoff is:

a physical measure such as volume is difficult to estimate because of shrinkage

physical volume usually has little relationship to the revenue producing power of
products

All of these answers are correct.

a physical measure usually results in the costs being allocated to the product that
weighs the most

Question 39 2 / 2 pts
The Gows Company processes unprocessed goat milk up to the splitoff point
where two products, condensed goat milk and skim goat milk result. The following
information was collected for the month of October:

Direct Materials processed: 130,000 gallons (shrinkage was 10%)

Production: condensed goat milk 52,200 gallons

skim goat milk 64,800 gallons

Sales: condensed goat milk. P3.50 per gallon

skim goat milk P2.50 per gallon

The costs of purchasing the 130,000 gallons of unprocessed goat milk and
processing it up to the splitoff point to yield a total of 117,000 gallons of salable
product was P144,480. There were no inventory balances of either product.

Condensed goat milk may be processed further to yield 39,000 gallons (the
remainder is shrinkage) of a medicinal milk product, Xyla, for an additional
processing cost of P3 per usable gallon. Xyla can be sold for P18 per gallon.

Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice
cream, for an additional processing cost per usable gallon of P2.50. The product
can be sold for P9 per gallon.

There are no beginning and ending inventory balances.

What is the estimated net realizable value of Xyla at the splitoff point?

P585,000

P365,300

P702,000

P505,800

Question 40 2 / 2 pts

The Gows Company processes unprocessed goat milk up to the splitoff point
where two products, condensed goat milk and skim goat milk result. The following
information was collected for the month of October:

Direct Materials processed: 130,000 gallons (shrinkage was 10%)

Production: condensed goat milk 52,200 gallons

skim goat milk 64,800 gallons

Sales: condensed goat milk. P3.50 per gallon

skim goat milk P2.50 per gallon

The costs of purchasing the 130,000 gallons of unprocessed goat milk and
processing it up to the splitoff point to yield a total of 117,000 gallons of salable
product was P144,480. There were no inventory balances of either product.

Condensed goat milk may be processed further to yield 39,000 gallons (the
remainder is shrinkage) of a medicinal milk product, Xyla, for an additional
processing cost of P3 per usable gallon. Xyla can be sold for P18 per gallon.

Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice
cream, for an additional processing cost per usable gallon of P2.50. The product
can be sold for P9 per gallon.

There are no beginning and ending inventory balances.

What is the estimated net realizable value of the skim goat ice cream at the splitoff
point?

P220,400

P505,800

P170,900

P365,300

Quiz Score: 47 out of 50