ACCT344 Cost Accounting: Week 5 Quiz (Version 1)

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ACCT344 Cost Accounting
Week 5 Quiz (Version 1)

1. (TCO 7) A common cost occurs (Points: 3)
When only one product or service is benefited
When different resources are used to produce one output
When the same resource is used in the output of two or more outputs
When a resource is used by two or more companies

2. (TCO 7) Which would be the most appropriate base for allocating the costs of the housekeeping department? (Points: 3)
Machine hours
Direct labor hours
Square feet
Number of employees

3. (TCO 7) The Ruling Company assigns plant administration costs to the production departments based on the number of employees. Which would NOT be a good combination of common costs with an activity driver? (Points: 3)
Personnel department costs based on number of employees
Purchasing department costs based on machine hours
Cafeteria costs based on meals served
Warehouse costs based on the value of materials stored

4. (TCO 7) Joint costs are allocated because of (Points: 3)
Financial reporting requirements
Tax reporting requirements
IMA requirements
Both A and B

5. (TCO 7) Which method allocates support department costs? (Points: 3)
Direct allocation method
Reciprocal allocation method
Sequential allocation method
All of the above

6. (TCO 7) Joint costs are (Points: 3)
Separable
Allocated on the basis of cause-and-effect relationships
Allocated arbitrarily
All of the above

7. (TCO 7) Which method allocates joint production costs based on the pounds of product produced? (Points: 3)
Sales-value-at-split-off method
Physical units method
Constant gross margin percentage method
Replacement cost method

8. (TCO 7) DeeDee Corporation manufactures the following products in its factory. $400,000 of costs were incurred.
Product Units Produced Weight per Unit (lb) Selling Price per Unit
A 2,500 10 $ 6
B 5,000 8 $12
C 7,500 6 $12
D 10,000 4 $ 6

How much joint cost would be allocated to Product A based on the physical units method? (Points : 3)
$420,000
$40,000
$66,667
$400,000

9. (TCO 7) Sally Corporation manufactures four products. The following data were provided by the cost accountant for the current year
Product Units Produced Sales Value at Split-Off
J 15,000 $10,000
K 9,000 $ 5,000
L 24,000 $ 6,000
M 12,000 $ 9,000
Total Joint Processing Costs $24,000

Which is the amount of joint costs assigned to Product J using the sales-value-at-split-off method? (Points : 3)
$8,000
$6,000
$24,000
$2,667

10. (TCO 7) Lamb Inc. processes wool into four grades of yarn as follows:
Product Yards Produced Sales Value at Split-Off
Merino Wool 75,000 $ 56,250
Wool Singles 200,000 $180,000
Superwash Wool 100,000 $105,000
Plied Wool 125,000 $127,500
Total Joint Processing Costs $300,000

Which is the amount of joint costs assigned to Superwash Wool using the constant gross margin percentage method? (Points : 3)
$300,000
$67,200
$37,800
$192,000
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