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The constant gross-margin percentage NRV method of joint cost allocation ________. a. involves allocating costs in such a way that maintaining the same gross margin

The constant gross-margin percentage NRV method of joint cost allocation ________.

a.

involves allocating costs in such a way that maintaining the same gross margin percentage for each product that was obtained in prior years

b.

computes gross margin before allocating the costs to the individual joint products

c.

is the same as the estimated NRV method

d. is the same as the sales-value at split-off method

  1. A company produces three products from a joint production process:: A, B, and C. As a percentage of total sales value, a represents 50%, B 49.5%, and C .5%. Product C could be considered a ________.

    a.

    primary product

    b.

    main product

    c.

    byproduct

    d.

    waste product

  1. Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. 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 October:

    Trees processed: 310 trees

    Production: paper 190,000 sheets

    pencil casings 190,000

    Sales: paper 178,000 at $0.10 per page

    pencil casings 189,000 at $0.14 per casing

    The cost of purchasing 310 trees and processing them up to the split-off point to yield 190,000 sheets of paper and 190,000 pencil casings is $13,500.

    Bismite's accounting department reported no beginning inventory.

    If the sales value at split-off method is used, what are the joint costs assigned to ending inventory for paper? (Round intermediary percentages to the nearest hundredth.)

    a.

    $355.29

    b.

    $29.61

    c.

    $497.34

    d.

    $379.24

  1. The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:

    Direct Materials processed: 27,500 gallons (after shrinkage)

    Production:

    Butter Cream

    12,500

    gallons

    Condensed Milk

    15,000

    gallons

    Sales:

    Butter Cream

    12,000

    gallons

    Condensed Milk

    14,500

    gallons

    Sales Price:

    Butter Cream

    $4.50

    per gallon

    Condensed Milk

    $8.00

    per gallon

    Separable costs in total:

    Butter Cream

    $13,000

    Condensed Milk

    $35,600

    The cost of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 27,500 gallons of saleable product was $53,000.

    The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. What is the allocated joint costs of Butter Cream? (Round intermediary percentages to the nearest hundredth.)

    a.

    $33,580

    b.

    $13,000

    c.

    $35,600

    d.

    $19,428

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