Question
When two products are produced during a common process, what is the factor that determines whether the products are joint products or one principal product
When two products are produced during a common process, what is the factor that determines whether the products are joint products or one principal product and a by-product?
a. Potential marketability for each product.
b. Amount of work expended in the production of each product.
c. Relative total sales value.
d. Management policy.
A well-designed activity-based costing system starts with
a. identifying the activity-cost pools.
b. computing the activity-based overhead rate.
c. assigning manufacturing overhead costs for each activity cost pool to products.
d. analyzing the activities performed to manufacture a product.
Advocates of variable costing argue that
a. fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset.
b. fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received.
c. fixed production costs should be charged to the period in which they are incurred unless sales do not equal production in which case any difference should be capitalized as an asset and amortized over future periods.
d. fixed production costs should be charged to the period in which they are incurred.
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