CHAPTER 14

1.Joint Costs are: 

C. Common costs.

2.For purposes of allocating joint costs to joint products, the relative sales value at split-
off point method could be used in which of the following situations?
B. Yes   ;    No

3.Which one of the following characteristics is not applicable to joint products?

D. None of the above.

4.The allocation of joint costs to individual products is useful primarily for purposes of:
C. Inventory costing.

5.All of the following are methods of allocating joint production costs

except the:
Net income method.

6.For purposes of allocating joint costs to joint products, the relative sales value at split-
off point is equal to:
B. Sales price at point of Sale reduced by cost to complete after split-off.

7.The method used for the allocation of joint costs to products is

important:
A. because profits will be affected when ending inventories change from the beginning of
the period.

8.Which of the following statement best describe a by-product?

A. A product that usually produces a small amount of revenue when compared to the
main product revenue.

9.In a joint production process, a by-product is also described as: 

A. a simultaneously produced product of relatively low value

10.Which method of accounting for by-products allocates a portion of joint costs to the
by-product?
B. Reversal cost method

11. In the reversal cost method, the manufacturing cost of the main product is reduced by:
None of the above.
12. If by-products are considered to be of relative minor importance, which by-product
method is most appropriate?
A. Net by-product revenue should be treated as a deduction from cost of goods sold of
the may product. 

13. Costs to be incurred after the split-off point are most useful for:
C. assessing the desirability of further processing

MULTIPLE CHOICES- COMPUTATIONAL 

1-3
The following information relates to the cost and the production for the First Department
of the Golf Manufacturing Company for the month of June 2018. The total manufacturing
costs applicable to Red and Blue in this
department were P21,000.

1.What is the amount of joint costs to be allocated to each kilo of each product using the
Physical Units (kilos)?
A. P1.05

2.What is the amount of joint costs to be allocated to each kilo of each product using the
Relative Sales Value at Split-off Point method?
A. P.79 per kilo (Red)  ;   P1.31 per kilo (Blue)

3.What is the amount of joint costs to be allocated to each kilo of each product using the
Adjusted Sales Value (net realizable sales value) method?
B. P.84 per kilo (Red)  ;  P1.50 per kilo (Blue)

4. Alpha Company manufactures Product A and product B from a joint process. Joint
costs are allocated on the basis of the sales value at split-off point. It costs P4,560 of
processing 500 units of Product A and 1,000 units of Product B to the split-off point.
What is Alpha's cost to produce 1,000 units of Product B?
B. P5,360

Bravo Company manufactures Products A and B from a joint process that also yields a
by-product, X. Bravo accounts for the revenues from its by-product sales as a deduction
from the cost of goods sold
of its main products. Additional information is as follows:
Assuming that joint costs are allocated using the sales value at split-off point method,
what is the joint cost allocated to Product B?
A. P86,591
6.Beta Company manufactures Products S and T from a joint process. The sales value at
split-offpoint was P50,000 for 6,000 units of Product
S and P50,000 for 2,000 units of Product T.
Assuming that the portion of the total joint cost properly allocated to Product S using
sales value at split-off point method was P30,000, what is the total joint cost?
A. P60,00

7.Leo Company manufactures three main products, X, Y and Z, from a joint process.
Joint costs are allocated on the basis of the adjusted sales value method (net realizable
value method).
Assuming that the 10,000 units of Product Z were processed further and sold for P87,000.
What was Leo's gross profit on this sale?
A. P39,000

8.Oro Company manufactures Product X and Y using joint process. The joint costs are
P10,000. Product X and Y can be sold at split-off for P12,000 and P8,000 respectively. If
the company uses the relative sales value method for allocating
joint costs, what is the joint cost allocated to Product X?
C. P6,000

9.Libra, Inc., manufactures products R, S, and T from a joint process.

Additional information is as follows:
Assuming that joint costs are allocated using the sales value at split-off method, what
were the joint costs allocated to Product S?
C. P30,000

10. Taurus Company manufactures two products, Product L and Product

M. The production process is such that both products are jointly processed. At the end of
the process, Product L is sold at P10 per unit, but Product M must be processed at a
further cost of P7 per
unit before it can be sold at P15 per unit.
Using the net realizable method (adjusted sales value), what is the cost of the ending
inventory of Product M?
B. P24,240

11. Aries Manufacturing Company manufactures two joint products. Product One sells at
P30 per unit, while Product Two sells at P60 per unit. The company uses the realizable
value method for
allocating joint costs.
What was the joint cost allocated to Product One?
B. P33,000
12. Plata Manufacturing Company, which began operations in 2010, produces main
product and by-product. The following information is available pertaining to 2018 sales
and producion:
Plata accounts for the by-product at the time of production. What are Plata's 2018 cost of
sales for main product and by-product:
D. P100,000 (Main Product)  ;   P0 (By-Product?

13. In Department Two of Peter Company, a by-product is removed. The material is

further processed and then sold. The company uses the reversal cost method (normal net
profit) to account for the by-product. Data for December 2018 follows:
What is the value assigned to the by-product and removed from the work in process at the
polnt of separatlon?
A. P7,800

14. In Department Three of the Gins Company, a portion of the materials (a by-product)
is removed, further processed, and sold. The company uses the reversal cost method to
account for the by-product. Data for
June follow:
What is the total cost of the by-product?
A. P1,440

15. Using the data in Number 14, what is the gain (loss) on sale of by-product if all the
units are sold at P1.50?
B. P 960

16. Cancer Tea Company produces tea bags, As part of the production process, the tea
leaves are separated from the stalks and stems. The tea leaves are sold as the main
product, while the stalks and stems are sold as the by-product. During May, the company
processed 25,000 boxes of tea bags at a unit cost of P0.75. Beginning inventory consisted
of 2,000 boxes at a unit cost of P0.70 per box. During May, 20,000 boxes were sold for
P1.75 each. The company also sold 500 units of stalks and stems at P850. Selling
expenses amounted to P12,000. The net revenue from by-product sales is deducted from
the production costs.
What is the net income of Cancer for the month of May?
D. P 8,704

17. Company uses the net realizable method to account for its by-product. The information below
relates to Gemini's main product and by-product for the current period:
What is Gemini's net income?
D. P14,870

18.Pieces Company manufactures joint products, D and E, and a by-product, F. Costs are assigned to the
joint products using the net realizable value method, which considers further processing costs in
subsequent operations. For allocating cost to the by-product, the reversal cost method is used. Total
manufacturing costs for 10,000
units were P172,000 during the quarter. Production data are presented below:
What is the gross profit from the sale of Product D?
A. P100,000

24. What is the cost of Product White sold for the year ended July 31, 2018?
A. P135,000

25. What is the cost of ending inventory for Product Red?

A. P18,000

26. In making frozen hash browns and potato chips, Mike Products Inc., generates potato skins as a by-
product. It sells the potato skins to restaurants for use as appetizers. The processing and disposal costs
associated with the sale of the product are P.10 per kilo of potato skins.
Assuming that the net realizable value of the by-product is subtracted from the joint cost of the main
products, how much is the net income for the period?
A. P55,025

27. Stella Corporation manufactures products R and S from a joint process. Additional
information as follows:
Assuming that joint costs are allocated on the basis of relative-sales-value at split-off,
what was the sales value at split-off for Product S?
A. P72,000
B. P82,000
C. P98,000
D. P100,000

28. Sisa Company manufacturers Product J and Product K from a joint process. For
Product J, 4,000 units were produced having a sales value at split-off of P15,000. If
Product J were processed further, the additional costs would be P3,000 and the sales
value would be P20,000. 
What was the total joint product costs? 
A. P14,400
B. P15,000
C. P18,400 
D. 19,000.

29. Bataan Co. produces main products JJ and MM. The process also
yields by-product BB. Net realizable value of by-product BB is subtracted from joint
production cost of JJ and MM. The following information pertains to production in July
2018 at a joint cost of P54,000.
If Bataan uses the realizable value method for allocating joint
cost, how much of the joint cost should be allocated to product JJ?
A. P18,800
B. P20,000
C. P26,667
D. P27,342

30. Korina Company manufactures products S and T from a joint process. The sales value
at split-off was P50,000 for 6,000 units of Product S and P25,000 for 2,000 units of
Product T. Assuming that the portion of the total joint costs properly allocated to Product
S using
the relative-sales-value at split-off approach was P30,000, what were
the total joint costs?
A. P40,000
B. P42,500
C. P45,000
D. P60,000

31.It costs Visaya Corp. P1,400,000 to process a main material to produce three-
chemicals: #111, # 777 and # 999. This joint cost is allocated to the product lines based
on the relative market values of the products produced. Additional data are summarized
below:
The product line that will have the least per unit contribution margin (after accounting for
share in joint and additional processing costs) is:
A. #111 at P(3.00)
B. #777 at P17.60
C. #111 at P13.00
D. #111 at P(10.48)

32. Abel Corp. manufactures a product that yields the by-product, "Yum." The only costs
associated with Yum are selling costs of P.10 for each unit sold. Abel accounts for sales
of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this
net amount from the major product's cost of goods sold. Yum's sales were 100,000
units at P1 each. If Abel changes its method of accounting for Yum's
sales by showing the net amount as additional sales revenue, then
Abel's gross margin would:
A. Increase by P90,000
B. Increase by P100,000
C. Increase by P110,000
D. Be unaffected 

33. A company produces two joint products, A and B. For the month of March, the joint
production costs were P120,000. Further processing costs beyond split-off point required
to make the products into marketable form and other related data follow:
The company uses the net realizable value method for allocating joint product costs. For
the month of March, the joint costs allocated to A amounted to
A. P66,000
B. P72,000
C. P60,000
D. P80,000

34. Kamagong Inc. produces two joint products, PEI and VEL. The joint production costs
for March 2018 were P15,000. During March 2018, further processing costs beyond the
split-off point, needed to convert the products into salable form were P8,000 and P12,000
for 800 units of PL and 400 units VEL, respectively. PEL sells for P25 per unit and VEL
sells for P50 per unit. Assuming that Kamagong uses the net realizable value method for
allocating joint product costs, what were the joint costs all allocated to product PEL for
March
2018?
A. P5,000
B. P6,000
C. P9,000
D. P10,000

35. Tomasa Inc. manufactures products X, Y and Z from a joint process. Joint product
costs were P60,000. Additional information is as follows.
What is the total costs allocated to product X?
     Physical Measure          Relative Sales Values
A. P30,000                          P28,000
B. P29,000                          P27,000
C. P30,000                          P21,000
D. P39,000                          P33,000

36. Camille Company manufactures products W, X, Y and Z from a joint process.

Additional information is as follows:
Assuming that total joint costs of P160,000 were allocated using relative-sales value at
split-off approach, what were the joint costs allocated to each product?
W        X         Y       Z
A. P40,000 P40,000 P40,000 P40,000
B. P53,333 P44,444 P35,556 P26,667
C. P60,000 P46,667 P33,333 P20,000
D. P64,000 P48,000 P32,000 P16,000 

37. Dennis Mfg. Co. manufactures two joint products and it uses the net realizable value
method for allocating joint costs. Product A sells for P30 while Product B sells for P60.
Joint costs for June, 2018 were:
Further processing costs after the split-off point in order to finish the products into their
final form amounted to P24,000 for Product A and P36,000 for Product B. The total units
produced during the month were 2,000 for Product A and 1,000 for Product B.
The amount of joint costs allocated to Product A was:

38. Kasoy Manufacturing Company manufactures two products, AA and BB. Initially,
they are processed from the same materials and then, after split-off, they are further
processed separately. Additional information is as follows:
Using the relative-sales-value approach, what are the assigned joint
costs of AA and BB respectively?
A. P3,000 and P3,300
B. P3,960 and P2,640
C. P4,400 and P2,200
D. P4,560 and P2,040

39. Adan Inc. purchases its major raw materials from Eva Co. and processes them up to
split-off point, where two products and (AA and CC) are obtained. The products are then
sold to an independent company that markets and distributes them to retail outlets. For
the
month just ended the following data were made avallable:
Using the sales value at split-off method the approximate weighted cost proportions (may
be rounded) of AA and CC were:
A. AA, 29% and CC, 71%
B. AA, 33% and CC, 67%
C. AA, 49% and CC, 51%
D. AA, 50% and CC, 50%

40. Vivien Company manufactures products N, P and R from a joint process. The
following information is available:
Assuming that joint product costs are allocated using the relative-sales-value at split-off
point approach, what was the saws at split-off for Product N and P?
Product N         Product P
A. P66,000       P84,000
B. P80,000       P70,000
C. P98,000       P84,000
D. P100,000      P50,000

41. Luzon Company manufactures three products, R, S, and T, in a joint process. For
every ten kilos of raw materials input, the output is five kilos of R, three kilos of S, and
two kilos of T.
What are the unit cost of Product R, S and T?
    R              S               T
A. P 7.12    P8.00     P10.20
B. P 8.00   P7.12      P10.20
C. P10.00   P8.00    P10.00
D. P25.32   P7.12     P10.00
42. Mindanao producers manufacture three joint products, JKA, JKB and JKC and a by-
product JJD, all in a single process. July were as follows:
The revenue from the by-product is credited to the sales account. Process costs are
apportioned on a relative sales value approach. What was the cost per kilogram of JKA
for the month?
A. P5.72
B. P5.50
C. P5.61
D. P5.20

43. Payaso Inc. produces chemicals Koo and Lam. The processing also
yields a by-product, Wiz, another chemical. The joint costs of processing is reduced by
the net realizable value of Wiz.
Assuming that the company uses the net realizable value method for allocating joint
costs, the allocated costs to Koo would amount to: 
A. P2,160,000
B. P1,800,000
C. P2,208,000
D. P2,700,000