1) If the amount of loss in a manufacturing process is abnormal, it should be classified as a:

a. Period cost.

b. Deferred charge.

c. Joint cost.

d. Product cost.

(2) If a company using the adjusted sales value method to assign joint costs produces two products, A and B, from a joint process, and B requires additional processing after the split-off in order to be salable, how is the joint cost allocated to B determined?

a.

The costs of the additional processing are ignored in allocating joint costs.

b.

The costs of the additional processing are subtracted from the joint costs allocated to B.

c.

The relative sales value used to allocate the joint cost are determined after the costs of further processing are subtracted from the ultimate sales value of B.

d. None of these are correct.

(3) Which of the following is most likely to be accounted for as a by-product?

		a. Heating oil resulting from processing crude oil at a refinery.
		b. Cream resulting from processing raw milk at a dairy.
		c. Sawdust resulting from processing lumber at a lumber mill.
		d. Ground beef resulting from processing beef at a meat packer.