ACCT 431 Test & Exam 3

Which of the following best describes how the constant​ gross-margin percentage NRV method allocates joint​ costs? A. An overall gross margin is calculated and for each product the gross margin is deducted along with separable costs from the final sales value of a product to derive the joint cost allocation for the product. B. An overall gross margin is calculated and for each product the gross margin is deducted along with separable costs from the final sales value of all the products produced in the joint processing and the allocations are then made based on physical volume measures. C. A gross margin is calculated and for each product the gross margin is deducted along with separable costs from the final sales value of a product to derive the joint cost allocation for a product. D. A gross margin is calculated and for each product the gross margin is deducted along with the final sales value of a product to derive the joint cost allocation for a product.

A. An overall gross margin is calculated and for each product the gross margin is deducted along with separable costs from the final sales value of a product to derive the joint cost allocation for the product.

Which of the following statements is true of joint production process and its​ components? A. Decisions relating to the sale or further processing of each identifiable product can be made independently of decisions about the other products beyond the​ split-off point. B. The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold. C. Distribution costs incurred beyond the​ split-off point assignable to each of the specific products identified at the​ split-off point are considered as joint costs. D. When a joint production process yields two or more products with low total sales values relative to the total sales values of other​ products, those products are called joint products.

A. Decisions relating to the sale or further processing of each identifiable product can be made independently of decisions about the other products beyond the​ split-off point.

Which of the following statements is true of process​ costing? A. In a period of falling​ prices, weighted-average​ process-costing method will result in a higher income tax liability as compared to FIFO​ process-costing method. B. The operating income and the income tax liability of a company are not affected by the method of​ process-costing being followed by the company. C. In the period of rising​ prices, weighted-average​ process-costing method will result in lower cost of goods sold as compared to FIFO​ process-costing method. D. In the period of rising​ prices, weighted-average​ process-costing method will result in higher operating income as compared to FIFO​ process-costing method.

A. In a period of falling​ prices, weighted-average​ process-costing method will result in a higher income tax liability as compared to FIFO​ process-costing method.

Which of the following is true of​ weighted-average process-costing? A. It calculates the cost per equivalent unit of all work done to​ date, regardless of the accounting period in which it was done. B. It does not represent the average cost of units when inputs prices fluctuates markedly from month to month. C. It arrives at the same unit costs as arrived under FIFO​ method, but the computations are easier under​ weighted-average process-costing. D. It facilitates​ period-to-period comparisons and hence is very useful in analyzing the performances of managers for different periods.

A. It calculates the cost per equivalent unit of all work done to​ date, regardless of the accounting period in which it was done.

If​ scrap, common to all​ jobs, is returned to the​ storeroom, the journal entry is​ ________. A. Materials Control dr Manufacturing Overhead Control cr B. Work-in-Process Control dr Materials Control cr C. Materials Control dr Work-in-Process Control cr D. Accounts Receivable dr Materials Control cr

A. Materials Control dr Manufacturing Overhead Control cr

Which of the following factors would guide you in classifying a product as a main product or​ byproduct? A. Percentage of total sales value B. Joint costs incurred up to the​ split-off point C. Number of units per processing period D. Weight or volume of outputs per period

A. Percentage of total sales value

In accounting for​ scrap, which of the following statements is​ true? A. Scrap records not only help measure​ efficiency, but also help keep track of​ scrap, and so reduce the chances of theft. B. Initial entries to scrap accounting records are most often made in dollar terms. C. Normal scrap is accounted for separately from abnormal scrap. D. In accounting for​ scrap, there is no distinction between the scrap attributable to a specific job and scrap common to all jobs.

A. Scrap records not only help measure​ efficiency, but also help keep track of​ scrap, and so reduce the chances of theft.

Which of the following entries reflects the original cost assignment to spoiled units before considering rework​ cost? A. Work-in-Process Control dr XXX Materials Control cr XXX Wages Payable Control cr XXX Manufacturing Overhead Allocated cr XXX B. Finished Goods Control dr XXX Work-in-Process Control cr XXX C. Manufacturing Overhead Allocated dr XXX Materials Control cr XXX Wages Payable Control cr XXX Work-in-Process Control cr XXX D. Materials Control dr XXX Wages Payable Control dr XXX Work-in-Process Control cr XXX Manufacturing Overhead Allocated cr XXX

A. Work-in-Process Control dr XXX Materials Control cr XXX Wages Payable Control cr XXX Manufacturing Overhead Allocated cr XXX

Spoilage that is not inherent in a particular production process and would not arise under efficient operating conditions is referred to​ as: A. abnormal spoilage B. incremental spoilage C. indirect spoilage D. usual spoilage

A. abnormal spoilage

Cost of spoiled units equals​ ________. A. all costs incurred in producing them up to the point of inspection B. all costs incurred in producing them up to the point of selling C. all costs incurred in producing them up to the point of delivery D. all costs incurred in producing them up to the point of packaging

A. all costs incurred in producing them up to the point of inspection

The constant​ gross-margin percentage NRV method of joint cost allocation​ ________. A. computes gross margin before allocating the costs to the products B. is the same as the estimated NRV method C. is the same as the​ sales-value at​ split-off method D. involves allocating costs in such a way that maintaining the same gross margin percentage for each product that was obtained in prior years

A. computes gross margin before allocating the costs to the products

The costs of normal spoilage are allocated to the units in ending work-in-process inventory, in addition to completed units if the units​ ________. A. in ending work-in-process inventory have passed the inspection point B. in ending work in process inventory are more than​ 25% complete C. in ending inventory have not passed the inspection point D. in ending work-in-process inventory are less than​ 25% complete

A. in ending work-in-process inventory have passed the inspection point

Early inspections can​ ________. A. prevent any further costs being wasted on units that are already spoiled B. increase any further costs being spent on units that are already spoiled C. prevent any further conversion costs being wasted on units that are already good D. increase conversion costs on units that are already spoiled

A. prevent any further costs being wasted on units that are already spoiled

Which of the following is an example of​ scrap? A. short lengths from woodworking operations that must be discarded B. defective aluminum cans sold to aluminum manufacturers for remelting to produce other aluminum products C. defective units of laptops detected after the production process but reworked before the units are sold as good products to customers D. defective​ shirts, jeans,​ shoes, and carpeting sold as seconds

A. short lengths from woodworking operations that must be discarded

The inspection point is the​ ________. A. stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units B. point at which the calculation of equivalent units is made C. stage of allocating total costs transferred out to good units completed and transferred D. point at which costs are allocated between normal and abnormal spoilage

A. stage of the production cycle where products are checked to determine whether they are acceptable or unacceptable units

Which of the following would not be a GAAP or managerial accounting reason for allocating joint​ costs? A. to avoid generating​ "negative" revenue when disposal costs are considered B. to analyze the profitability of various divisions C. to calculate cost of goods sold D. for reimbursement of costs under a federal contract

A. to avoid generating​ "negative" revenue when disposal costs are considered

Which of the following statements best describes conversion​ costs? A. Conversion costs are all manufacturing and nonmanufacturing costs. B. Conversion costs are all manufacturing costs other than direct materials costs. C. Conversion costs are all nonmanufacturing costs other than fixed selling and distribution costs. D. Conversion costs are all nonmanufacturing costs including marketing costs.

B. Conversion costs are all manufacturing costs other than direct materials costs.

A major advantage of using the FIFO​ process-costing method is​ that: A. in the period of rising​ prices, it leads to lower operating income and lower tax​ payments, saving the company cash and increasing the​ company's value B. FIFO provides managers with information about changes in the costs per unit from one period to the next C. in contrast with the​ weighted-average method, FIFO is considered GAAP D. FIFO makes the unit cost calculations simpler

B. FIFO provides managers with information about changes in the costs per unit from one period to the next

Which of the following statements is true of normal​ spoilage? A. It occurs due to machine breakdowns and operator errors. B. It arises even when the process is carried out in an efficient manner. C. It is usually regarded as avoidable and controllable. D. It is a spoilage which is not inherent in a particular production process.

B. It arises even when the process is carried out in an efficient manner.

Which of the following is false regarding net realizable value​ (NRV)? A. The constant NRV method uses an identical​ gross-margin percentage for each product to allocate joint costs. B. NRV is the estimated selling price after processing the product beyond the​ split-off point. C. The estimated NRV at the​ split-off point is calculated by taking the sales value after further processing and deducting additional processing costs. D. It is better to use a​ product's market value at the​ split-off point than its estimated NRV.

B. NRV is the estimated selling price after processing the product beyond the​ split-off point.

In joint​ costing, which method assumes that all the markup is attributable to the joint process​ costs? A. physical measures method B. NRV method C. sales value at​ split-off method D. constant​ gross-margin percentage method

B. NRV method

Which of the following statements is true of​ scrap? A. When a production process yields two or more products with high total sales values relative to the total sales values of other​ products, those are called scrap. B. Scrap is either sold or disposed of quickly or it is stored for later​ sale, disposal, or reuse. C. For accounting​ purpose, distinction is made between normal and abnormal scrap. D. Scrap refers to units of​ production, fully or partially​ completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices

B. Scrap is either sold or disposed of quickly or it is stored for later​ sale, disposal, or reuse.

Which of the following statements is true of joint​ costing? A. The primary purpose of joint costing is to allocate the separable costs to the individual products that are eventually sold. B. The costs of a production process that yields multiple products simultaneously are called joint costs. C. Distribution costs incurred beyond the​ split-off point that are assignable to each of the specific products identified at the​ split-off point are considered as joint costs. D. Joint costing is less useful for companies which manufacture multiple products simultaneously from the same production process

B. The costs of a production process that yields multiple products simultaneously are called joint costs.

How does the net realizable value method allocate joint​ costs? A. allocates joint costs to joint products in a way that each product has an identical​ gross-margin percentage B. allocates joint costs to joint products on the basis of relative NRV C. allocates joint costs to joint products on the basis of a comparable physical measure at the​ split-off point D. allocates joint costs to joint products on the basis of the relative sales value at the​ split-off point

B. allocates joint costs to joint products on the basis of relative NRV

In a​ process-costing system average unit costs are calculated​ ________. A. by multiplying total costs in a given accounting period by total units produced in that period B. by dividing total costs in a given accounting period by total units produced in that period C. by multiplying total costs in a given accounting period by units started in that period D. by dividing total costs in a given accounting period by units started in that period

B. by dividing total costs in a given accounting period by total units produced in that period

Which of the following best describes​ transferred-in costs? A. they are​ value-added costs that are only considered in the​ first-in,first-out process costing system B. costs incurred in a previous department or process that are carried forward as the​ product's cost as that product moves to another department or process in the production cycle C. they are the shipping costs related to finished goods that are transported to a​ customer's location D. they are the cost of transferring products from a vendor

B. costs incurred in a previous department or process that are carried forward as the​ product's cost as that product moves to another department or process in the production cycle

Managers find operation costing useful in cost management because​ it: A. uses job costing to account for the conversion costs and process costing for the material and customizable components B. focuses on control of physical processes of a given production system C. often results in profit maximization D. results in cost minimization

B. focuses on control of physical processes of a given production system

Normal spoilage is computed on the basis of the number of​ ________. A. units that pass the inspection point during the current period B. good units that pass inspection during the current period C. units that are in ending work in process D. units that started during the particular period

B. good units that pass inspection during the current period

In joint​ costing, which of the following changes may lead to a change in product​ classification? A. main product sales price increases due to a new application B. main product becomes technologically obsolete and​ it's market value falls significantly C. byproduct sales price decreases due to a new government regulation D. byproduct losses value due to a competing products

B. main product becomes technologically obsolete and​ it's market value falls significantly

A leather shoe manufacturer makes​ "duck" boots that consist of leather and rubber. Some of the books are defective and are sold in the factory store at deep discounts. Leather strips from the cutting process and rubber shavings are byproducts of the process. The leather strips have no use and are discarded while the rubber scraps are collected and periodically picked up by a recycling company at no cost to the shoe manufacturer. Which of the following classifications of these items would be​ accurate? A. all three items are spoilage B. the defective boots are spoilage and the leather and the rubber are scrap C. the defective boots are​ spoilage, the leather strips are​ scrap, and the rubber is rework D. the defective​ boots, leather and rubber are scrap but the shoes are more valuable scrap as they can be sold

B. the defective boots are spoilage and the leather and the rubber are scrap

To recognize the disposal value of normal​ spoilage, ________. A. Work-in-Process Control account is debited with spoiled goods at current net disposal value. B. Manufacturing Overhead Control account is credited with spoiled goods at current net disposal value. C. Materials Control account is debited with spoiled goods at current net disposal value. D. Manufacturing Overhead Control account is debited with spoiled goods at current net disposal value.

C. Materials Control account is debited with spoiled goods at current net disposal value.

Which of the following is a journal entry to recognize the disposal​ value? A. Work-in-Process Control dr XXX Manufacturing Overhead Control dr XXX Materials Control cr XXX B. Materials Control dr XXX Work-in-Process Control dr XXX Manufacturing Overhead Control cr XXX C. Materials Control dr XXX Work-in-Process Control cr XXX D. Manufacturing Overhead Control dr XXX Work-in-Process Control cr XXX

C. Materials Control dr XXX Work-in-Process Control cr XXX

Under the​ weighted-average method, how would you calculate the cost per equivalent units with regards to conversion​ costs? A. conversion costs for work done in the current​ period/units completed and transferred out in the current period B. (total direct labor costs in beginning work in process​ + conversion cost for work done in the current​ period)/(units completed and transferred out during the period​ + equivalent units in ending​ inventory) C. (total conversion costs in beginning work in process​ + conversion cost for work done in the current​ period)/(units completed and transferred out during the period​ + equivalent units in ending​ inventory) D. (total conversion costs in beginning work in​ process)/(units completed and transferred out during the period​ + equivalent units in ending​ inventory)

C. (total conversion costs in beginning work in process​ + conversion cost for work done in the current​ period)/(units completed and transferred out during the period​ + equivalent units in ending​ inventory)

When the amount of scrap is material and the scrap is sold immediately after it is​ produced, which of the following is the journal entry if the scrap attributable to a specific job is sold on​ account? A. Work-in-Process Control dr Accounts Receivable cr B. Scrap Revenues dr Accounts Payable cr C. Accounts Receivable dr Work-in-Process Control cr D. Work-in-Process Control dr Accounts Payable cr

C. Accounts Receivable dr Work-in-Process Control cr

When the amount of scrap is​ immaterial, which of the following is the easiest accounting entry when recording scrap sold for​ cash? A. Sales of scrap dr Accounts Receivable cr B. Sales of Scrap dr Cash cr C. Cash dr Scrap Revenues cr D. Manufacturing Overhead Control dr Cash cr

C. Cash dr Scrap Revenues cr

Which of the following sentences is true of classification of spoilage as normal or abnormal when inventories are​ present? A. Classifying spoilage as normal rather than abnormal results in a decrease in current operating income. B. Classifying spoilage as abnormal rather than normal results in an increase in current operating income. C. Classifying spoilage as normal rather than abnormal results in an increase in current operating income. D. Classifying spoilage as normal rather than abnormal results in same current operating income.

C. Classifying spoilage as normal rather than abnormal results in an increase in current operating income.

Which of the following statements is true of costs of normal and abnormal​ spoilage? A. Costs of normal spoilage are separately accounted for as losses of the accounting period in which they are detected. B. Costs of normal spoilage are shown as an asset in a balance​ sheet; however, abnormal spoilage costs are shown as liabilities in a balance sheet. C. Costs of abnormal spoilage are separately accounted for as losses of the accounting period in which they are detected. D. Costs of abnormal spoilage are shown as an asset in a balance​ sheet; however, normal spoilage costs are shown as liabilities in a balance sheet.

C. Costs of abnormal spoilage are separately accounted for as losses of the accounting period in which they are detected.

Which of the following statements best define split off point in joint costing? A. It is the point at which managers decide to discontinue one or more of the products B. It is the juncture at which decisions determining joint costs of various products to be produced are taken C. It is the juncture in a joint production process when two or more products become separately identifiable D. It is the point at which the managers decide to outsource some of its production processes

C. It is the juncture in a joint production process when two or more products become separately identifiable

Which of the following statements is true of the production method of accounting for​ byproducts? A. It adds revenues of the byproduct to the cost of goods sold in the income statement. B. It records revenues of the byproduct in the income statement as revenue. C. It is the preferred method because of the matching principle. D. It makes no journal entries until the byproduct is sold.

C. It is the preferred method because of the matching principle.

Which one of the following conditions usually exists when comparing normal and abnormal spoilage to​ controllability? A. Normal is Controllable and Abnormal is Controllable B. Normal is Controllable and Abnormal is Uncontrollable C. Normal is Uncontrollable and Abnormal is Controllable D. Normal is Uncontrollable and Abnormal is Uncontrollable

C. Normal is Uncontrollable and Abnormal is Controllable

Which of the following sentences is true of normal spoilage and abnormal​ spoilage? A. Abnormal spoilage costs are inventoriable and are deducted from the cost of good units​ produced, while normal spoilage costs are expensed in the accounting period in which they occur. B. Abnormal spoilage costs are inventoriable and are added to the cost of good units​ produced, while normal spoilage costs are expensed in the accounting period in which they occur. C. Normal spoilage costs are inventoriable and are added to the cost of good units​ produced, while abnormal spoilage costs are deducted from the cost of good units produced. D. Normal spoilage costs are inventoriable and are deducted from the cost of good units​ produced, while abnormal spoilage costs are expensed in the accounting period in which they occur.

C. Normal spoilage costs are inventoriable and are added to the cost of good units​ produced, while abnormal spoilage costs are deducted from the cost of good units produced.

Which of the following statements is true of the methods for allocating joint​ costs? A. The complexity of the sales value at​ split-off method increases when managers make frequent changes to the sequence of​ post-split-off processing decisions. B. The NRV method treats the joint products as though they comprise a single product. C. The NRV method assumes that none of the markup is attributable to the separable costs. D. The sales value at​ split-off method lacks a common basis for allocating joint costs to products.

C. The NRV method assumes that none of the markup is attributable to the separable costs.

Which of the following statements is true of the methods for allocating joint​ costs? A. The sales value at​ split-off method always results in the same gross-margin percentage for all products. B. The net realizable value method uses the sales value of the units sold during the accounting period to allocate joint costs. C. The sales value at​ split-off method allocates joint costs to each product in proportion to the sales value of total production. D. The net realizable value method results in the same joint production cost per unit for all products.

C. The sales value at​ split-off method allocates joint costs to each product in proportion to the sales value of total production.

Which of the following is true of unit costs of normal and abnormal spoilage when they are detected at the same inspection​ point? A. Addition of unit cost of normal spoilage and unit cost of abnormal spoilage is equal to unit cost of good units produced and transferred. B. Unit cost of abnormal spoilage is more than unit cost of normal spoilage. C. Unit cost of normal spoilage is equal to unit cost of abnormal spoilage. D. Unit cost of normal spoilage is more than unit cost of abnormal spoilage.

C. Unit cost of normal spoilage is equal to unit cost of abnormal spoilage.

Which of the following companies is most likely to use an​ operation-costing system? A. a company involved in manufacture of ball bearing on a large scale B. a company that has been awarded a contract to construct a bridge for the government C. a company that makes suits for which the basic design is​ same, but depending on​ specifications, each batch of suits varies somewhat from other batches D. a furniture making company which makes furniture pieces as per the specifications of the customers

C. a company that makes suits for which the basic design is​ same, but depending on​ specifications, each batch of suits varies somewhat from other batches

Transferred-in costs are treated as if they​ are: A. direct labor costs added at the beginning of the process B. conversion costs added at the beginning of the process C. a separate direct material added at the beginning of the process D. costs of beginning inventory added at the beginning of the process

C. a separate direct material added at the beginning of the process

Costs of abnormal spoilage are usually accounted for as​ ________. A. a deduction from the cost of goods sold B. a component of the costs of good units manufactured C. a separate line item in an income statement D. an asset on a balance sheet

C. a separate line item in an income statement

The loss from abnormal spoilage account would​ appear: A. as a deduction from the cost of goods sold B. on a balance sheet C. as a separate line item on an income statement D. as a detailed item in the retained earnings schedule of a balance sheet

C. as a separate line item on an income statement

Under the FIFO​ method, all spoilage costs are assumed to be related to the units​ ________. A. in beginning​ inventory, plus the units completed during the period B. in both beginning and ending inventory plus the units completed during the period C. completed during the​ period, using the unit costs of that period D. in ending inventory

C. completed during the​ period, using the unit costs of that period

Excluding spoiled units in the equivalent-unit calculation results in​ ________. A. lower cost per good unit. B. higher cost for spoiled units C. higher cost per good unit D. better management information

C. higher cost per good unit

Which of the following factors would NOT be one of the reasons why the sales value at the​ split-off would be used to allocate joint​ costs? A. the sales value method is a good measure of benefits received B. it is a method that is independent of further processing decisions C. it helps determine manager compensation and performance evaluation D. it provides a common allocation basis

C. it helps determine manager compensation and performance evaluation

Which of the following is a​ market-based approach to allocating joint​ costs? A. physical measures B. units of production C. net realizable value D. sales units

C. net realizable value

Which method of accounting recognizes byproducts in the financial statements at the time their production is​ completed? A. gross margin method B. sales method C. production method D. market value method

C. production method

The​ weighted-average process-costing method calculates the equivalent units​ by: A. the units started during the current period minus the units in ending inventory B. considering only the work done during the current period C. the equivalent units completed during the current period plus the equivalent units in ending inventory D. the units started during the current period plus the units in ending inventory

C. the equivalent units completed during the current period plus the equivalent units in ending inventory

Which of the following is true of the calculation of the cost per good unit​ (a unit that is completed and transferred​ out) under the weighted-average process costing​ method? A. the numerator only includes the materials and conversion costs of good units and excludes the costs of spoiled units B. the calculation is total costs transferred out divided by the good units that were transferred out C. the equivalent units in the denominator include goods completed and transferred out and all units that were spoiled D. the equivalent units in the denominator include goods completed and transferred out and excludes the units that were spoiled

C. the equivalent units in the denominator include goods completed and transferred out and all units that were spoiled

Which of the following describes rework​? A. residual material that results from manufacturing a product B. products of a joint production process that have low total sales values relative to the total sales value of the main product C. units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units D. units of production whether fully or partially​ completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices

C. units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units

The purpose of the​ equivalent-unit computation is to​ : A. satisfy the GAAP requirements which requires all partially completed goods to be reported as​ equivalent-units B. predict the future production capabilities of the organization C. use a common metric to estimate the amount of work done on units in a period D. convert completed units into the amount of partially completed output units that could be made with that quantity of input

C. use a common metric to estimate the amount of work done on units in a period

Which of the following is not true of the joint allocation​ methods? A. the constant​ gross-margin percentage NRV method treats the joint products as though they comprise a single product B. when selling prices of all products at the​ split-off are​ unavailable, the NRV method is the best alternative C. when selling prices are at the​ split-off point are available but further processing is​ necessary, the NRV method is the preferred allocation method D. the sales value at the​ split-off method is the best measure of benefits received

C. when selling prices are at the​ split-off point are available but further processing is​ necessary, the NRV method is the preferred allocation method

A distinct feature of the FIFO​ process-costing method is that​ the: A. work done on ending inventory is kept separate from the work done during the current period in the calculation of equivalent units and is usually not included in the calculation B. work done on beginning inventory before the current period is blended with the work done during the current period in the calculation of equivalent units C. work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units D. FIFO​ process-costing method is only minimally different from the​ weighted-average process-costing method

C. work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units

Which of the following is true of the​ physical-measure approach of allocating joint​ costs? A. The physical measure reflects a​ product's ability to generate revenues. B. Obtaining comparable physical measures for all products is always straightforward. C. Physical measures usually result in less costs being allocated to the product that weighs the most. D. Costs cannot be allocated if the measurement basis for each product are different.

D. Costs cannot be allocated if the measurement basis for each product are different.

Which of the following companies is most likely to use process​ costing? A. Crimpson​ Color, a company selling customized garments for niche customers B. Grimpy​ Corp., a company manufacturing furniture for customers as per their requirements C. Effel​ & Associates, a consulting firm providing various audit and related services D. Dental Bright​ Inc., a company manufacturing and selling toothpaste on a large scale

D. Dental Bright​ Inc., a company manufacturing and selling toothpaste on a large scale

Which of the following entries is correct when the costs of the rework is normal and common to all the​ jobs? A. Wages Payable Control dr XXX Manufacturing Overhead Allocated dr XXX Manufacturing Overhead Control cr XXX Materials Control cr XXX B. Wages Payable Control dr XXX Manufacturing Overhead Allocated cr XXX C. Work-in-Process Control dr XXX Materials Control dr XXX Wages Payable Control cr XXX Manufacturing Overhead Allocated cr XXX D. Manufacturing Overhead Control dr XXX Materials Control cr XXX Wages Payable Control cr XXX Manufacturing Overhead Allocated cr XXX

D. Manufacturing Overhead Control dr XXX Materials Control cr XXX Wages Payable Control cr XXX Manufacturing Overhead Allocated cr XXX

If scrap is reused as direct material rather than sold as​ scrap, which of the following would be the proper​ account? A. Manufacturing Overhead Control is debited at its estimated net realizable value and then credited when the scrap is reused B. Work-in-Process Control is debited at its estimated net realizable value and then credited when the scrap is reused C. Accounts Receivable is debited at its estimated net realizable value and then credited when the scrap is reused D. Materials Control is debited at its estimated net realizable value and then credited when the scrap is reused

D. Materials Control is debited at its estimated net realizable value and then credited when the scrap is reused

Which of the following statements is true of normal spoilage and abnormal​ spoilage? A. The costs of normal spoilage are recorded as a loss as a separate line item in an income​ statement, whereas costs of abnormal spoilage are included as a component of the costs of good units manufactured. B. Normal spoilage is usually regarded as avoidable and​ controllable, whereas abnormal spoilage is unavoidable and uncontrollable. C. Abnormal spoilage arises even when the process is carried out in an efficient​ manner, whereas normal spoilage does not arise when the process is carried out in an efficient manner. D. Normal spoilage is inherent in a particular production​ process, whereas abnormal spoilage is not inherent in a particular production process.

D. Normal spoilage is inherent in a particular production​ process, whereas abnormal spoilage is not inherent in a particular production process.

Which of the following statements is true of the methods for allocating joint​ costs? A. Constant​ gross-margin percentage method results in same joint production cost per unit for all products. B. Estimated net realizable value method results in same gross margin percentage for all products. C. Present value allocation method is the least preferred method due to its complex calculations. D. Sales value at​ split-off method uses the sales value of the entire production of the accounting period to allocate costs.

D. Sales value at​ split-off method uses the sales value of the entire production of the accounting period to allocate costs.

Which of the following statements is true of the methods for allocating joint​ costs? A. The NRV method is never used when the selling prices of joint products vary frequently. B. Under the​ cause-and-effect criterion, the​ physical-measure method is highly desirable. C. Byproducts are never excluded from the denominator used in the​ physical-measure method. D. The sales value at​ split-off method follows the​ benefits-received criterion of cost allocation.

D. The sales value at​ split-off method follows the​ benefits-received criterion of cost allocation.

If a company set a standard of zero rework​ ________. A. all rework is treated as normal and is shown as a liability of the current period B. all rework is treated as normal and is written off as a cost of the current period C. all rework is treated as abnormal and is shown as a liability of the current period D. all rework is treated as abnormal and is written off as a cost of the current period

D. all rework is treated as abnormal and is written off as a cost of the current period

Which of the following steps are part of the​ first-in, first-out​ (FIFO) process-costing​ method? A. assumes as part of its first step that the most recently worked on units are completed and transferred out first B. assumes as part of its first step that there is no beginning​ work-in-process C. assignment of costs of the current​ period's equivalent units to the first units completed and transferred out of the process D. assignment of costs of the previous​ period's equivalent units in beginning​ work-in-process inventory to the first units completed and transferred out of the process

D. assignment of costs of the previous​ period's equivalent units in beginning​ work-in-process inventory to the first units completed and transferred out of the process

When spoiled goods have a disposal​ value, the net cost of the spoilage is computed by​ ________. A. deducting the costs to complete a saleable product from the costs accumulated to the inspection point B. adding disposal value to the costs of the good units transferred C. adding the costs to complete a saleable product to the costs accumulated to the inspection point D. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point

D. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point

Which of the following is an example of​ spoilage? A. defective units of laptops detected after the production process but reworked before the units are sold as good products to customers B. short lengths from woodworking operations that cannot be used to make another product C. edges from plastic molding operations that result from the main​ product's manufacturing process but have little or no value D. defective​ men's button down cotton collar dress shirts that have small pulls in the material and must be sold as discounted​ "seconds" in the factory store

D. defective​ men's button down cotton collar dress shirts that have small pulls in the material and must be sold as discounted​ "seconds" in the factory store

In the computation of the cost per equivalent​ unit, the​ weighted-average method of process costing considers all the​ costs: A. that have entered work in process from the units started or transferred in during the current accounting period B. that have entered work in process during the current accounting period from the units started or transferred in plus the costs associated with ending inventory C. that have entered work in process during the current accounting period from the units started or transferred in minus the costs associated with ending inventory D. entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period

D. entering work in process from the units in beginning inventory plus the costs for the work completed during the current accounting period

If the rework is abnormal​ ________. A. it is credited to Wages Payable Control B. it is debited to Wages Payable Control C. it is credited to Loss from Abnormal Rework D. it is debited to Loss from Abnormal Rework

D. it is debited to Loss from Abnormal Rework

When a single manufacturing process yields two​ products, one of which has a relatively high sales value compared to the​ other, the two products are respectively known​ as: A. joint products and scrap B. main products and joint products C. joint products and byproducts D. main products and byproducts

D. main products and byproducts

Which if the following is a negative consequence of recording byproducts in the accounting records when the sale​ occurs? A. earnings cannot be timed under this method B. it involves complex calculations compared to the production method C. the revenue from the byproducts is usually fairly large and the accounting records will be distorted D. managers can be tempted to stockpile byproducts

D. managers can be tempted to stockpile byproducts

Which of the following reasons explain why a​ physical-measure to allocate joint costs is less preferred than the sales value at​ split-off point? A. a​ physical-measure such as volume is more difficult to estimate than sales value B. a​ physical-measure usually results in less costs being allocated to the product that weighs the most C. customers will easily understand that the products are overpriced D. physical volume usually has little relationship to the revenue producing power of products

D. physical volume usually has little relationship to the revenue producing power of products

Which of the following is not true of the​ weighted-average process-costing​ method? A. the method calculates the cost per equivalent unit of all work done to date regardless of the accounting period in which the work was done B. the costs to account for are equal to the beginning work in process plus the costs added to work in process during the same period C. the​ weighted-average cost is the total of all costs entering the​ Work-in-Process account divided by the total equivalent units in ending​ work-in-process inventory D. the costs in​ work-in-process (beginning work in​ process) when the period starts are not considered when calculating the​ weighted-average cost per equivalent unit

D. the costs in​ work-in-process (beginning work in​ process) when the period starts are not considered when calculating the​ weighted-average cost per equivalent unit

When a product is the result of a joint​ process, the decision to process the product past the split-off point further should be influenced by which of the following​ measures? A. the​ product's proportion of the total costs B. the portion of the joint costs allocated to the individual products C. the extra revenue earned past the split-off point D. the incremental operating income earned past the split-off point

D. the incremental operating income earned past the split-off point

Which of the following defines spoilage​? A. units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units B. products of a joint production process that have low total sales values relative to the total sales value of the main product C. residual material that results from manufacturing a product D. units of production whether fully or partially​ completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices

D. units of production whether fully or partially​ completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices