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DeeDee Corporation

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1. The cost of crude oil used in producing gasoline products is an example of
A. joint costs.
b. a by-product.
c. joint products.
d. common cost allocation.

2. Which of the following methods allocates joint production costs based on the pounds of product produced?
A. sales-value-at-split-off method
B. constant gross margin percentage method
C. physical units method
D. replacement cost method


3. DeeDee Corporation manufactures the following products in its factory, $400,000 of costs were incurred.
                        Units               Weight per      Selling price
Product            Produced         Units (lb)         Per unit
A                     2,500               10                    $6
B                     5,000               8                      $12
C                     7,500               6                      $12
D                     10,000             4                      $6
                        25,000
How much joint cost would be allocated to Product A based on the physical units method?  
a.     40,000    
b.     460,000
c.     66,667
d.     400,000

4. 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
 30,000

5. What is the amount of joint costs assigned to Product J using the sales-value-at-split-off method
a.     8,000    
b.     6,000
c.     24,000
d.     2,667

6. 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
Flied Wool
 125,000
 127,500
 468,750
Total Joint processing costs   300,000
What is the amount of joint costs assigned to Wool Singles using the constant gross margin percentage method?
a.     115,200 
b.     300,000
c.     64,8000
d.     192,000

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