Chapter 16 test bank with answers Horngren\'s Cost Accounting: A Managerial Emphasis, 16th Global Edition PDF

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Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren)Chapter 16 Cost Allocation: Joint Products and Byproducts16 Objective 16.1) What is the name of a cost of production process that yields multiple products simultaneously? A) byproduct B) joint C) main D) separable Answer: B Diff: ...

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Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren) Cha pt e r1 6 Cos tAl l oc at i on: J oi ntPr oduc t sa ndBypr oduc t s 1 6 . 1 Obj e c t i ve1 6 . 1 1 )Wha ti st hena meofac os tofpr oduc t i onpr oc e s st ha tyi e l dsmul t i pl epr oduc t ss i mul t a ne ous l y? A)bypr oduc t B)j oi nt C)mai n D)s e pa r a bl e Ans we r :B Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 )Whi c hoft hef ol l o wi ngs t a t e me nt sbe s tde fines pl i toffpoi nti nj oi ntc os t i ng? A)I ti st hepoi nta twhi c hma na ge r sde c i det odi s c ont i nueoneormor eoft hepr oduc t s . B)I ti st hepoi nta twhi c ht hema na ge r sde c i det oout s our c es omeofi t spr oduc t i onpr oc e s s e s . C)I ti st hej unc t ur ei naj oi ntpr oduc t i onpr oc e s swhe nt woormor epr oduc t sbe c omes e par a t e l y i de nt i fia bl e . D)I ti st hej unc t ur ea twhi c hde c i s i onsde t e r mi ni ngj oi ntc os t sofva r i ouspr oduc t st obepr oduc e da r e t a ke n. Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

3 )Whi c hoft hef ol l o wi ngs t a t e me nt si st r ueofj oi ntpr oduc t i onpr oc e s sandi t sc ompone nt s ? A)Di s t r i but i onc os t si nc ur r e dbe yondt hes pl i t offpoi ntas s i gna bl et oe ac hoft hes pe c i ficpr oduc t s i de nt i fie da tt hes pl i t offpoi ntar ec ons i de r e dasj oi ntc os t s . B)De c i s i onsr e l a t i ngt ot hes a l eorf ur t he rpr oc e s s i ngofe ac hi de nt i fia bl epr oduc tc a nbemade i nde pe nde nt l yofde c i s i onsaboutt heot he rpr oduc t sbe y ondt hes pl i t offpoi nt . C)Whe naj oi ntpr oduc t i onpr oc e s syi e l dst woormor epr oduc t swi t hl ow t ot a ls al e sva l ue sr e l a t i vet ot he t ot a ls a l e sva l ue sofot he rpr oduc t s ,t hos epr oduc t sar ec a l l e dj oi ntpr oduc t s . D)Thepr i mar ypur pos eofj oi ntc os t i ngi st oa l l oc a t et hes e pa r a bl ec os t st ot hei ndi vi dualpr oduc t st ha t a r ee ve nt ual l ys ol d. Ans we r :B Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

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4 )Thec hal l e ngeofapr oduc t i onf ac i l i t yt ha ti spr oduc i ngs e ve r a lpr oduc t sf r om i show t oa l l oc a t et he j oi ntc os t st ha ta r ei nc ur r e d_ __ _ __ _ _. A)be f or et hes pl i t offpoi nt B)a f t e rt hes pl i t offpoi nt C)a tt hes pl i t offpoi nt D)a tt hee ndofpr oduc t i on Ans we r :C Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

5 )Whi c hoft hef ol l o wi ngs t a t e me nt si st r ueofj oi ntc os t i ng? A)Thec os t sofapr oduc t i onpr oc e s st ha tyi e l dsmul t i pl epr oduc t ss i mul t a ne ous l yar ec a l l e dj oi ntc os t s . B)Di s t r i but i onc os t si nc ur r e dbe y ondt hes pl i t offpoi ntt ha tar eas s i gna bl et oe ac hoft hes pe c i ficpr oduc t s i de nt i fie da tt hes pl i t offpoi ntar ec ons i de r e dasj oi ntc os t s . C)Thepr i ma r ypur pos eofj oi ntc os t i ngi st oal l oc a t et hes e par a bl ec os t st ot hei ndi vi dualpr oduc t st ha t a r ee ve nt ual l ys ol d. D)J oi ntc os t i ngi sl e s sus e f ulf orc ompa ni e swhi c hmanuf a c t ur emul t i pl epr oduc t ss i mul t a ne ous l yf r om t hes amepr oduc t i onpr oc e s s . Ans we r :A Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

6 )Whe nas i ngl emanuf a c t ur i ngpr oc e s syi e l dst wopr oduc t s , oneofwhi c hha sar e l a t i ve l yhi ghs a l e s va l uec ompa r e dt ot heot he r ,t het wopr oduc t sa r er e s pe c t i ve l yknownas__ _ __ _ _ _. A)j oi ntpr oduc t sa ndbypr oduc t s B)j oi ntpr oduc t sands c r a p C)mai npr oduc t sa ndbypr oduc t s D)mai npr oduc t sa ndj oi ntpr oduc t s Ans we r :C Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

7 )Whi c hoft hef ol l o wi ngs t a t e me nt sbe s tde finej oi ntpr oduc t s ? A)Whe nonepr oduc tha sahi ght ot als a l e sval uec ompa r e dwi t ht het ot a ls a l e sva l ueofot he rpr oduc t sof t hepr oc e s s , t ha tpr oduc ti sc a l l e daj oi ntpr oduc t . B)Pr oduc tofaj oi ntpr oduc t i onpr oc e s st ha tha vet hes a mes al e sval uec ompar e dwi t ht het ot a ls al e s va l ueoft hebypr oduc t si sc al l e daj oi ntpr oduc t . C)Whe nonepr oduc tha sal ow t ot a ls a l e sva l uec ompa r e dwi t ht het ot a ls a l e sval ueofot he rpr oduc t sof t hepr oc e s s , t ha tpr oduc ti sc a l l e daj oi ntpr oduc t . D)Whe naj oi ntpr oduc t i onpr oc e s syi e l dst woormor epr oduc t swi t hhi ght ot a ls al e sval ue sr e l a t i vet o t het ot a ls a l e sva l ue sofot he rpr oduc t s ,t hos epr oduc t sar ec a l l e dj oi ntpr oduc t s . Ans we r :D Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

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8 )Ac ompa nypr oduc e st hr e epr oduc t sf r om aj oi ntpr oduc t i onpr oc e s s : :A,B,a ndC.Asape r c e nt a geof t ot a ls a l e sva l ue , ar e pr e s e nt s5 0 %, B4 9. 5%,andC. 5 %.Pr oduc tCc oul dbec ons i de r e da__ _ __ _ _ _. A)pr i mar ypr oduc t B)mai npr oduc t C)bypr oduc t D)wa s t epr oduc t Ans we r :C Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

9 )Whi c hoft hef ol l o wi ngf ac t or swoul dgui deyoui nc l as s i f yi ngapr oduc ta samai npr oduc tor bypr oduc t ? A)Numbe rofuni t spe rpr oc e s s i ngpe r i od B)We i ghtorvol umeofout put spe rpe r i od C)Pe r c e nt a geoft ot als a l e sval ue D)J oi ntc os t si nc ur r e dupt ot hes pl i t offpoi nt Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

1 0 )I nj oi ntc os t i ng, whi c hoft hef ol l o wi ngc hange sma yl e a dt oac ha ngei npr oduc tc l a s s i fic a t i on? A)ma i npr oduc ts a l e spr i c ei nc r e as e sduet oane wa ppl i c a t i on B)bypr oduc ts a l e spr i c ede c r e a s e sduet oane w gove r nme ntr e gul a t i on C)mai npr oduc tbe c ome st e c hnol ogi c a l l yobs ol e t ea ndi t ' smar ke tva l uef a l l ss i gni fic a nt l y D)bypr oduc tl os s e sval ueduet oac ompe t i ngpr oduc t s Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 1 )Ti mbe rl ogsar epr oc e s s e di nt os t andar dl umbe rus e di nhomec ons t r uc t i onandwoodc hi pst ha twi l l bes ol dt ol a nds c a pe r s .How woul dt he s epr oduc t sbec l a s s i fie d? A)pr i mar ypr oduc t s B)mai npr oduc t s C)j oi ntpr oduc t s D)apr i mar ypr oduc tandabypr oduc t Ans we r :D Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

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1 2 )Whi c hoft hef ol l owi ngs t a t e me nt si st r ueofma i npr oduc t sandbypr oduc t s ? A)A bypr oduc twi l lne ve rbe c omeamai npr oduc t . B)Ama i npr oduc twi l lne ve rbe c omeabypr oduc t . C)Pr oduc tc l a s s i fic a t i onsma yc ha ngeove rt i me . D)Pr oduc tc l a s s i fic a t i onsr e ma i nsc ons t a ntove rt i me . Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 3 )Out put swi t hane ga t i ves a l e sva l uebe c a us eofdi s pos a lc os t sha vewhi c hoft hef ol l o wi ngi mpa c ton c os t s ? A)adde dt oc os tofgoodss ol d B)a dde dt oj oi ntpr oduc t i onc os t sanda l l oc a t e dt oj oi ntorma i npr oduc t s C)adde dt oj oi ntpr oduc t i onc os t sa nda l l oc a t e dt obypr oduc t sa nds c r ap D)s ubt r ac t e df r om pr oduc tr e ve nue Ans we r :B Di ff: 3 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 4 )J oi ntc os t sa r ei nc ur r e dbe y ondt hes pl i t offpoi nta ndar ea s s i gnabl et oi ndi vi dua lpr oduc t s . Ans we r :F ALSE Expl a na t i on:J oi ntc os t sa r ei nc ur r e dpr i ort ot hes pl i t offpoi nt . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 5 )J oi ntc os t i ngal l oc a t e st hej oi ntc os t st ot hei ndi vi dua lpr oduc t st ha ta r ee ve nt ual l ys ol d. Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 6 )Se par abl ec os t si nc l udemanuf ac t ur i ngc os t sonl y . Ans we r :F ALSE Expl a na t i on:Se pa r abl ec os t si nc l udemanuf ac t ur i ng, ma r ke t i ng, di s t r i but i on, andot he rc os t s . Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 7 )Cl a s s i fic a t i onofmai npr oduc t s , j oi ntpr oduc t s , a ndbypr oduc t sc a nal wa ysbedonewi t he a s e . Ans we r :F ALSE Expl a na t i on:I npr a c t i c e ,di s t i nc t i onsa mongma i npr oduc t s ,j oi ntpr oduc t s , a ndbypr oduc t sar enots o c l e arc ut . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

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1 8 )J oi ntc os t sa r et hec os t sofapr oduc t i onpr oc e s st ha tyi e l dsmul t i pl epr oduc t ss i mul t a ne ous l y . Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 9 )Thej unc t ur ei naj oi ntpr oduc t i onpr oc e s swhe nt wopr oduc t sbe c omes e par a bl ei st hebypr oduc t poi nt . Ans we r :F ALSE Expl a na t i on:Thej unc t ur ei naj oi ntpr oduc t i onpr oc e s swhe nt wopr oduc t sbe c omes e par abl ei st hes pl i t offpoi nt . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 0 )Be f or et hes pl i t offpoi nt , de c i s i onsr e l a t i ngt ot hes a l eorf ur t he rpr oc e s s i ngofe a c hi de nt i fia bl e pr oduc tc a nnotbemadei nde pe nde nt l yofde c i s i onsaboutt heot he rpr oduc t s . Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

2 1 )Whe naj oi ntpr oduc t i onpr oc e s syi e l dsonepr oduc twi t hahi ght ot als a l e sval uec ompar e dt ot het ot a l s al e sval ueoft heot he rpr oduc t soft hepr oc e s s , t ha tpr oduc ti sc al l e daj oi ntpr oduc t . Ans we r :F ALSE Expl a na t i on:Tha tpr oduc twoul dbec a l l e dama i npr oduc t . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 2 )Al lpr oduc t syi e l de df r om j oi ntpr oduc tpr oc e s s i ngha ves omepos i t i veva l uet ot hefir m. Ans we r :F ALSE Expl a na t i on:Nota l l pr oduc t syi e l de df r om j oi ntpr oduc tpr oc e s s i ngha ves omepos i t i veva l uet ot hefir m. Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 3 )I ft heval ueofabypr oduc tdr opss i gni fic a nt l y ,i tc oul da l s obevi e we da saj oi ntpr oduc t . Ans we r :F ALSE Expl a na t i on:I ft heva l ueofabypr oduc tdr opss i gni fic a nt l y ,i twi l lr e ma i nasabypr oduc tonl y . Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

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2 4 )I ne a c hoft hef ol l o wi ngi ndus t r i e s ,i de nt i f ypos s i bl ej oi nt( ors e ve r abl e )pr oduc t sa tt hes pl i t offpoi nt . a . Coal b . Pe t r ol e um c . Da i r y d. Lamb e . Lumbe r f . Coc oaBe a ns g. Chr i s t ma sTr e e s h. Sal t i . Cowhi de Ans we r : a . Coke , Ga s ,Be nz ol e , Ta r ,Ammoni a b . Cr udeOi l , Ga s ,Ra w LPG c . Mi l k,But t e r ,Che e s e ,I c eCr e a m,Ski m Mi l k d. LambCut s , Tr i pe , Hi de s ,Bone s ,Fa t e . Boar d,Ne ws pr i nt , Sha vi ngs ,Chi ps , e t c . f . Coc oaBut t e r , Coc oaPowde r , Coc oaShe l l s g. Chr i s t ma sTr e e s ,Wr e a t hs , De c or a t i ons h. Hydr oge n,Chl or i ne ,Ca us t i cSoda i . Le a t he r ,Sue de , Che wT oys Di ff: 3 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 5 )De finet het e r msma i npr oduc t , j oi ntpr oduc t , a ndb ypr oduc t .Gi vea tl e a s tonee xa mpl eofe a c ht ype ofpr oduc t . Ans we r :Mai npr oduc t-Whe nonepr oduc tha sahi ght ot als a l e sval uec ompa r e dwi t ht het ot a ls a l e s va l ueofot he rpr oduc t soft hepr oc e s s . Ex .t i mbe rpr oc e s s e di nt ol umbe r J oi ntpr oduc t-Whe naj oi ntpr oduc t i onpr oc e s syi e l dst woormor epr oduc t swi t hhi ght ot a ls al e sva l ue c ompar e dwi t ht het ot a ls al e sva l ueofot he rpr oduc t s .Ex .c r udeoi lpr oc e s s e di nt oga s ol i neandke r os e ne Bypr oduc t-Pr oduc t sofaj oi ntpr oduc t i onpr oc e s st ha tha vel ow t ot a ls a l e sva l uec ompa r e dwi t ht het ot a l s al e sval ueoft hema i npr oduc torj oi ntpr oduc t s . Ex .woodc hi psc r e a t e dwhe nt i mbe rpr oc e s s e di nt o l umbe r Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

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2 6 )Si l ve rCompa nyus e soner a w ma t e r i al ,s i l ve ror e , f ora l lofi t spr oduc t s . I ts pe ndsc ons i de r a bl et i me ge t t i ngt hes i l ve rf r om t heor ebe f or ei ts t a r t st hea c t ual pr oc e s s i ngoft hefini s he dpr oduc t s , r i ngs ,l oc ke t s , e t c . Tr a di t i ona l l y ,t hec ompa nyma deonepr oduc ta tat i meandc ha r ge dt hepr oduc twi t ha l lc os t sof pr oduc t i on, f r om or et ofinali ns pe c t i on. Howe ve r ,i nr e c e ntmont hs ,t hec os tac c ount i ngr e por t sha vebe e n s ome wha tdi s t ur bi ngt omana ge me nt .I ts e e mst ha ts omeoft hefini s he dpr oduc t sar ec os t i ngmor et ha n t he ys houl d, e ve nt ot hepoi ntofappr oa c hi ngt he i rr e t ai lval ue .I tha sbe e nnot e dbyt heac c ount i ng ma na ge rt ha tt hi spr obl e m be ga nwhe nt hec ompanys t ar t e dbuyi ngor ef r om di ffe r e ntpar t soft hewor l d, s omeofwhi c hr e qui r edi ffic ul te xt r a c t i onme t hods . Re qui r ed: Ca nyoue x pl ai nhow t hec ompanymi ghtc ha ngei t sa c c ount i ngs ys t e mt or e fle c tt her e por t i ngpr obl e ms be t t e r ?Ar et he r eot he rpr obl e mswi t ht hepur c ha s i nga r e a? Ans we r :I tappe a r st ha tt hec ompa nyne e dst os t ar tas s i gni ngal le x t r ac t i onc os t st oaj oi nt c os tc a t e gor y . I t i sunf a i rt ha tt hefini s he dpr oduc t sr e c e i veahi ghc os ts i mpl ybe c a us eac e r t a i nba t c hofor ewa sve r y e xpe ns i vet or unt hr ought hee xt r a c t i onpr oc e s swhe nt hene xtfini s he dpr oduc t swe r epr oduc e df r om s i l ve rt ha twa se a s yt oe xt r ac t . I fa l le xt r ac t i onc os t sar ec ons i de r e dj oi nt ,t he ne a c hfini s he dpr oduc twoul ds ha r ei nt hea ve r a gec os tof e xt r a c t i on, r a t he rt ha nbe i ngc har ge dwi t ht hec os tofas pe c i ficba t c h.Thi ss houl dr e s ul ti nc os t st ha ta r e mor er e fle c t i veoft hepr oduc t ' sa c t ualc os t . Addi t i ona lpr obl e msma ybewi t ht hepur c ha s i ngde pa r t me nt .Theac c ount i ngde par t me ntma yhe l p hi ghl i ghtt hepr obl e m buti tdoe snotpi npoi ntt hea c t ua lpr obl e m. Ma ybet hec ompa nys houl dbuy r e fine ds i l ve rore l s ehi r ee xpe r t si nt hemi ne r al sar e aaspa r toft hepur c ha s i ngt e am. Di ff: 2 Obj e c t i ve :1 AACSB:Appl i c a t i onofknowl e dge

2 7 )Wha ta r ej oi ntc os t s ,s e par abl ec os t s ,andas pl i t offpoi nt ? Ans we r :J oi ntc os t sa r et hec os t sofas i ngl epr oduc t i onpr oc e s st ha tyi e l dmul t i pl epr oduc t s s i mul t ane ous l y . Se pa r abl ec os t sar eal lc os t si nc ur r e dbe y ondt hes pl i t offpoi ntt ha ta r eas s i gna bl et oe a c hoft hes pe c i fic pr oduc t si de nt i fie da tt hes pl i t offpoi nt . Thes pl i t offpoi nti st hej unc t ur ei naj oi ntpr oduc t i onpr oc e s swhe nt hepr oduc t sbe c omes e par a t e l y i de nt i fia bl e . Ane xa mpl ei st hepoi nta twhi c hc oalbe c ome sc oke , na t ur a lga s ,andot he rpr oduc t s . Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 8 )Di s c us si nbr i e fhow e a s yi ti sf orc ompani e st oc l a s s i f ypr oduc t sasma i npr oduc t s ,j oi ntpr oduc t s , a nd bypr oduc t s . Ans we r :Di s t i nc t i onsamongma i npr oduc t s , j oi ntpr oduc t s , a ndbypr oduc t sa r enots oc l e a rc uti n pr ac t i c e .Compa ni e sus edi ffe r e ntt hr e s hol dsf orde t e r mi ni ngwhe t he rt her e l a t i ves a l e sva l ueofapr oduc t i shi ghe noughf ori tt obec ons i de r e daj oi ntpr oduc t .Mor e ove r ,t hec l a s s i fic a t i onofpr oduc t sc a nc hange ove rt i me ,e s pe c i al l yf orpr oduc t swhos es e l l i ngpr i c e sc ha ngef r e que nt l y . Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

2 9 )Expl a i nt hedi ffe r e nc ebe t we e naj oi ntpr oduc tandabypr oduc t .Ca nabypr oduc te ve rbe c omeaj oi nt pr oduc t ?Al s o , c a naj oi ntpr oduc te ve rbe c omeabypr oduc t ? Ans we r :Thedi ffe r e nt i a t i ngf a c t orbe t we e naj oi ntpr oduc ta ndabypr oduc ti st hes a l e sval uea tt hes pl i t offpoi nt .J oi ntpr oduc t sha vehi ght ot als a l e sval uea tt hes pl i t offpoi nt .Abypr oduc tha sal ow t ot a ls a l e s va l uea tt hes pl i t offpoi nt . Pr oduc t sc anc ha ngef r om bypr oduc t st oj oi ntpr oduc t swhe nt he i rt ot als a l e s va l ue si nc r e as es i gni fic a nt l y . Al s o ,pr oduc t sc a nc ha ngef r om j oi ntpr oduc t st obypr oduc t swhe nt he i r t ot a ls a l e sva l ue sde c r e a s es i gni fic a nt l y . 7 Copyright © 2018 Pearson Education, Ltd.

Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c alt hi nki ng

1 6 . 2 Obj e c t i ve1 6 . 2 1 )Whi c hoft hef ol l o wi ngwoul dnotbeaGAAPormana ge r i a lac c ount i ngr e a s onf ora l l oc a t i ngj oi nt c os t s ? A)t oc a l c ul a t ec os tofgoodss ol d B)t oana l yzet hepr ofit abi l i t yofva r i ouspr oduc t s C)f orr e i mbur s e me ntofc os t sunde raf e de r a lc ont r a c t D)t oe val ua t et hepe r f or manc eofdi vi s i onmana ge r s Ans we r :A Di ff: 2 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

2 )Whi c hoft hef ol l o wi ngwoul de xpl a i nwhyac ompanymi ghtne e dt of ol l ow ve r ys t r i nge ntr ul e st ha t s pe c i f yt hewa yi nwhi c hj oi ntc os t sa r ea s s i gne dt opr oduc t s ? A)t os a t i s f yaf e de r a lc ont r ac tr e i mbur s e me nts t i pul a t i ons B)Sot ha tc os tofgoodss ol di sa c c ur a t ef ori nc omet axpur pos e s C)t os a t i s f yF ASB D)t oi nc r e a s emar ke ts har e Ans we r :A Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c alt hi nki ng

3 )Oneoft her e a s onst oa l l oc a t ej oi ntc os t st oi ndi vi dualpr oduc t si st oha vec os t sr e i mbur s e dunde ra f e de r a lc os t =pl usc ont r a c t . Ans we r :TRUE Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c alt hi nki ng

4 )Al l oc a t i ngj oi ntc os t st oi ndi vi dua lpr oduc t sc a nbehe l pf ulf orl i t i ga t i ons e t t l e me ntpur pos e si nwhi c h t hec os t sofj oi ntpr oduc t sors e r vi c e sar eke yi nput s . Ans we r :TRUE Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c alt hi nki ng

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5 )Li s tt hr e er e a s onswhyweal l oc a t ej oi ntc os t st oi ndi vi dua lpr oduc t sors e r vi c e s . Gi veane x ampl eof whe nt hepa r t i c ul a rc os ta l l oc a t i onr e a s onwoul dc omei nt ous e . Ans we r : a .F o ri nv e nt o r yc o s t i ng , a ndc o s to fg o o d ss o l dc o mp ut a t i o nsf o rfina nc i a la c c o unt i ngp ur po s e s . Exa mpl e :Cos tofgoodss ol dande ndi ngi nve nt or yval ua t i oni sne c e s s a r yf orr e por t st os ha r e hol de r s a ndf ort hei nl andr e ve nues e r vi c e . b . Fo ri nt e r na lc o s t i nga ndc o s to fg o o d ss o l dc o mp ut a t i o nsf o ri nt e r na lr e po r t i ngpur po s e s . Exa mpl e :The s ec omput a t i onsa r ene c e s s a r yf ordi vi s i onpr ofit abi l i t ya na l ys i s . c . Re i mb ur s e me ntund e rc o nt r a c t s . Exa mpl e :Afir m pr oduc e smul t i pl epr oduc t sors e r vi c e s a ndus e st hes a mer e s our c e sandf a c i l i t i e st o pr oduc et hepr oduc t sors e r vi c e s . Butnotal lt hefir m' spr oduc t sar eunde rt hec ont r ac t .Thefir m mus t a l l oc a t et hec os toft he s es ha r e df a c i l i t i e sorr e s our c e st or e fle c tt hepor t i onus e dbyt hepr oduc tunde rt he c ont r ac t . d. I ns ur a nc es e t t l e me ntc o mput a t i o ns . Exa mpl e :Whe r eabus i ne s swi t hmul t i pl epr oduc t sors e r vi c e sc l a i ml os s e sunde ra ni ns ur a nc epol i c y a ndwa nt st oc a l c ul a t et hel os s .Thei ns ur anc ec ompa nyandt hei ns ur e dmus ta gr e eont heval ueoft he l os s . e . Ra t er e gul a t i o n.Whe nc ompa ni e sa r es ubj e c tt or a t er e gul a t i on,t heal l oc a t i onofj oi ntc os t sc a nbea s i gni fic a ntf a c t ori nde t e r mi ni ngt he...