The reciprocal method of allocating service department costs: A. Determines the variable costs for calculating net income B. Recognizes all services provided by any department including those provided to other service departments C. Determines the net realizable value of the final products D. Records the derived percentages and cost values for the final cost centers E. Provides the cost of by-products

7. What are the two methods of allocating joint costs? A. Physical quantity and net realizable value B. Physical quantity and final gross margin C. Net realizable value and joint production process D. Net realizable value and allocated department costs

8. When accounting for by-products is done via the sales / other revenue method:

A. It minimized recordkeeping

B. Inventory costs are not required

C. The dollar amount is generally immaterial

D. All of the above

9. For joint products and joint product costing, the sell now or process further decision:

A. Does not impact the financial statements

B. Does not consider the sales value at split-off point

C. Is determined by comparing the sales value at split-off versus the net sales value after split-off

D. Ignores additional processing costs

10. Allocating service department costs and allocating joint product costs are necessary for:

A. Management decision making

B. Buy or sell process

C. Pricing only

D. Negating a cause-and-effect relationship between costs and objects