35.Budde Chemicals produces two industrial chemical compounds, X15 and Z24, from the same process, which last year, cost $300,000. Budde produced 15,000 gallons of X15, which sells for $40 per gallon and 45,000 gallons of Z24, which sells for $20 per gallon. Using the physical units method, how much of the joint cost should be allocated to X15?

a.$100,000 b.$225,000 c.$60,000 d.$75,000

36.Which of the following statements best describes a by-product?

a.A product with a value that can easily and accurately be determined. b.A product that has a greater value than the main product. c.A product created along with the main product whose sales value does not cover the cost of its production. d.A product that usually produces a small amount of revenue when compared to the main product revenue.

37.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.

38.Which of the following is not an acceptable method for accounting for by-products in a joint manufacturing process?

a.Costs before the split-off point are allocated to by-products. b.The estimated sales value of the by-product reduces the cost of the main product. c.The joint costs allocated to by-products are included in an account called By-products Inventory. d.In some instances, the revenue from selling by-products may be treated as other income on the income statement.

39.Thomas Lumber Company produces furniture grade lumber and building grade lumber from a joint process. Sawdust, a by-product of the manufacturing process is sold to a local toy manufacturer to stuff leather toys for $10 per ton. In February, the company produced 3,000 tons of sawdust. What is the entry to reduce the cost of the main products by the estimated sales value of the by-product?

a.By-product inventory $30,000 Work in process $30,000 b.Work in process $30,000 Other income $30,000 c.Cost of goods sold $30,000 By-product inventory $30,000 d.By-product inventory $30,000 Gain or loss on sale of by-product $30,000