The Freed Company produces three products, X, Y, Z, from a single raw material input.
admin
61. The Freed Company produces
three products, X, Y, Z, from a single raw material input. Product Y can be
sold at the splitoff point for total revenues of $50,000, or it can be
processed further at a total cost of $16,000 and then sold for $68,000. Product
Y:
A) should be sold at the split-off point,
rather than processed further.
B) would increase the company’s overall net
operating income by $18,000 if processed further and then sold.
C) would increase the company’s overall net
operating income by $68,000 if processed further and then sold.
D) would increase the company’s overall net
operating income by $2,000 if processed further and then sold.
62. Pendall Company manufactures products Dee and
Eff from a joint process. Product Dee has been allocated $2,500 of the $20,000
in total joint costs associated with the production of 1,000 units each of Dee
and Eff each year. Dee can be sold at the split-off point for $3 per unit, or
it can be processed further with additional costs of $1,000 and sold for $5 per
unit. If Dee is processed further and sold, the result would be:
A) A break-even situation.
B) An additional gain of $1,000 from further
processing.
C) A loss of $1,000 from further processing.
D) An additional gain of $2,000 from further
processing.
63. Faustina Chemical Company manufactures three
chemicals (TX14, NJ35, and KS63) from a joint process. The three chemicals are
in industrial grade form at the split-off point. They can either be sold at
that point or processed further into premium grade. Costs related to each batch
of this chemical process is as follows:
TX14
NJ35
KS63
Sales value at split-off point………………….
$16,000
$12,000
$5,000
Allocated joint costs…………………………….
$6,000
$6,000
$6,000
Sales value after further processing………..
$20,000
$18,000
$9,000
Cost of further processing…………………….
$5,000
$3,000
$2,000
For which
product(s) above would it be more profitable for Faustina to sell at the
split-off point rather than process further?
A) TX14 only
B) KS63 only
C) TX14 and KS63 only
D) NJ35 and KS63 only
64. Khiem, Inc. manufactures baseball gloves that
normally sell for $55 each. Khiem currently has 400 defective gloves in
inventory that have $35 of materials, labor, and overhead assigned to each
glove. The defective gloves can either be completely repaired at a cost of $25
per glove or sold as is at a reduced price of $18 per glove. Khiem would be
better off by:
A) $2,000 to sell the gloves at the reduced
price.
B) $2,800 to sell the gloves at the reduced
price.
C) $4,800 to repair the gloves and sell them
at the normal price.
D) $5,200 to sell the gloves at the reduced
price.
65. Two products, QI and VH, emerge from a joint
process. Product QI has been allocated $9,600 of the total joint costs of
$12,000. A total of 9,000 units of product QI are produced from the joint
process. Product QI can be sold at the split-off point for $13 per unit, or it
can be processed further for an additional total cost of $54,000 and then sold
for $18 per unit. If product QI is processed further and sold, what would be
the effect on the overall profit of the company compared with sale in its
unprocessed form directly after the split-off point?
A) $18,600 less profit
B) $108,000 more profit
C) $600 more profit
D) $9,000 less profit
66. Two products, UG and BC, emerge from a joint
process. Product UG has been allocated $29,400 of the total joint costs of
$42,000. A total of 9,000 units of product UG are produced from the joint
process. Product UG can be sold at the split-off point for $15 per unit, or it
can be processed further for an additional total cost of $63,000 and then sold
for $17 per unit. If product UG is processed further and sold, what would be
the effect on the overall profit of the company compared with sale in its
unprocessed form directly after the split-off point?
A) $74,400 less profit
B) $15,600 less profit
C) $45,000 less profit
D) $90,000 more profit
67. Priddy Corporation processes sugar cane in
batches. The company purchases a batch of sugar cane for $62 from farmers and
then crushes the cane in the company’s plant at the cost of $18. Two
intermediate products, cane fiber and cane juice, emerge from the crushing
process. The cane fiber can be sold as is for $28 or processed further for $13
to make the end product industrial fiber that is sold for $36. The cane juice
can be sold as is for $43 or processed further for $23 to make the end product
molasses that is sold for $85. Which of the intermediate products should be
processed further?
A) Cane fiber should NOT be processed into
industrial fiber; Cane juice should be processed into molasses
B) Cane fiber should be processed into
industrial fiber; Cane juice should NOT be processed into molasses
C) Cane fiber should be processed into
industrial fiber; Cane juice should be processed into molasses
D) Cane fiber should NOT be processed into
industrial fiber; Cane juice should NOT be processed into molasses
68. Vannorman Corporation processes sugar beets in
batches. A batch of sugar beets costs $78 to buy from farmers and $18 to crush
in the company’s plant. Two intermediate products, beet fiber and beet juice,
emerge from the crushing process. The beet fiber can be sold as is for $25 or
processed further for $16 to make the end product industrial fiber that is sold
for $57. The beet juice can be sold as is for $39 or processed further for $22
to make the end product refined sugar that is sold for $84. How much profit
(loss) does the company make by processing one batch of sugar beets into the
end products industrial fiber and refined sugar?
A) ($134)
B) ($32)
C) $7
D) $39
69. Stinehelfer Beet Processors, Inc., processes
sugar beets in batches. A batch of sugar beets costs $56 to buy from farmers
and $13 to crush in the company’s plant. Two intermediate products, beet fiber
and beet juice, emerge from the crushing process. The beet fiber can be sold as
is for $24 or processed further for $12 to make the end product industrial
fiber that is sold for $31. The beet juice can be sold as is for $43 or
processed further for $29 to make the end product refined sugar that is sold
for $91. How much profit (loss) does the company make by processing the
intermediate product beet juice into refined sugar rather than selling it as
is?
A) $19
B) $6
C) ($50)
D) ($16)
70. Paine Corporation processes sugar beets in
batches that it purchases from farmers for $72 a batch. A batch of sugar beets
costs $11 to crush in the company’s plant. Two intermediate products, beet
fiber and beet juice, emerge from the crushing process. The beet fiber can be
sold as is for $27 or processed further for $16 to make the end product
industrial fiber that is sold for $40. The beet juice can be sold as is for $43
or processed further for $28 to make the end product refined sugar that is sold
for $100. Which of the intermediate products should be processed further?
A) beet fiber should NOT be processed into
industrial fiber; beet juice should be processed into refined sugar
B) beet fiber should NOT be processed into
industrial fiber; beet juice should NOT be processed into refined sugar
C) beet fiber should be processed into
industrial fiber; beet juice should NOT be processed into refined sugar
D) beet fiber should be processed into
industrial fiber; beet juice should be processed into refined sugar
61. The Freed Company produces
three products, X, Y, Z, from a single raw material input. Product Y can be
sold at the splitoff point for total revenues of $50,000, or it can be
processed further at a total cost of $16,000 and then sold for $68,000. Product
Y: A) should be sold at the split-off point,
rather than processed further. B) would increase the company’s overall net
operating income by $18,000 if processed further and then sold. C) would increase the company’s overall net
operating income by $68,000 if processed further and then sold. D) would increase the company’s overall net
operating income by $2,000 if processed further and then sold. 62. Pendall Company manufactures products Dee and
Eff from a joint process. Product Dee has been allocated $2,500 of the $20,000
in total joint costs associated with the production of 1,000 units each of Dee
and Eff each year. Dee can be sold at the split-off point for $3 per unit, or
it can be processed further with additional costs of $1,000 and sold for $5 per
unit. If Dee is processed further and sold, the result would be: A) A break-even situation. B) An additional gain of $1,000 from further
processing. C) A loss of $1,000 from further processing. D) An additional gain of $2,000 from further
processing. 63. Faustina Chemical Company manufactures three
chemicals (TX14, NJ35, and KS63) from a joint process. The three chemicals are
in industrial grade form at the split-off point. They can either be sold at
that point or processed further into premium grade. Costs related to each batch
of this chemical process is as follows: TX14NJ35KS63Sales value at split-off point…………………. $16,000$12,000$5,000Allocated joint costs……………………………. $6,000$6,000$6,000Sales value after further processing……….. $20,000$18,000$9,000Cost of further processing……………………. $5,000$3,000$2,000 For which
product(s) above would it be more profitable for Faustina to sell at the
split-off point rather than process further? A) TX14 only B) KS63 only C) TX14 and KS63 only D) NJ35 and KS63 only 64. Khiem, Inc. manufactures baseball gloves that
normally sell for $55 each. Khiem currently has 400 defective gloves in
inventory that have $35 of materials, labor, and overhead assigned to each
glove. The defective gloves can either be completely repaired at a cost of $25
per glove or sold as is at a reduced price of $18 per glove. Khiem would be
better off by: A) $2,000 to sell the gloves at the reduced
price. B) $2,800 to sell the gloves at the reduced
price. C) $4,800 to repair the gloves and sell them
at the normal price. D) $5,200 to sell the gloves at the reduced
price. 65. Two products, QI and VH, emerge from a joint
process. Product QI has been allocated $9,600 of the total joint costs of
$12,000. A total of 9,000 units of product QI are produced from the joint
process. Product QI can be sold at the split-off point for $13 per unit, or it
can be processed further for an additional total cost of $54,000 and then sold
for $18 per unit. If product QI is processed further and sold, what would be
the effect on the overall profit of the company compared with sale in its
unprocessed form directly after the split-off point? A) $18,600 less profit B) $108,000 more profit C) $600 more profit D) $9,000 less profit 66. Two products, UG and BC, emerge from a joint
process. Product UG has been allocated $29,400 of the total joint costs of
$42,000. A total of 9,000 units of product UG are produced from the joint
process. Product UG can be sold at the split-off point for $15 per unit, or it
can be processed further for an additional total cost of $63,000 and then sold
for $17 per unit. If product UG is processed further and sold, what would be
the effect on the overall profit of the company compared with sale in its
unprocessed form directly after the split-off point? A) $74,400 less profit B) $15,600 less profit C) $45,000 less profit D) $90,000 more profit 67. Priddy Corporation processes sugar cane in
batches. The company purchases a batch of sugar cane for $62 from farmers and
then crushes the cane in the company’s plant at the cost of $18. Two
intermediate products, cane fiber and cane juice, emerge from the crushing
process. The cane fiber can be sold as is for $28 or processed further for $13
to make the end product industrial fiber that is sold for $36. The cane juice
can be sold as is for $43 or processed further for $23 to make the end product
molasses that is sold for $85. Which of the intermediate products should be
processed further? A) Cane fiber should NOT be processed into
industrial fiber; Cane juice should be processed into molasses B) Cane fiber should be processed into
industrial fiber; Cane juice should NOT be processed into molasses C) Cane fiber should be processed into
industrial fiber; Cane juice should be processed into molasses D) Cane fiber should NOT be processed into
industrial fiber; Cane juice should NOT be processed into molasses 68. Vannorman Corporation processes sugar beets in
batches. A batch of sugar beets costs $78 to buy from farmers and $18 to crush
in the company’s plant. Two intermediate products, beet fiber and beet juice,
emerge from the crushing process. The beet fiber can be sold as is for $25 or
processed further for $16 to make the end product industrial fiber that is sold
for $57. The beet juice can be sold as is for $39 or processed further for $22
to make the end product refined sugar that is sold for $84. How much profit
(loss) does the company make by processing one batch of sugar beets into the
end products industrial fiber and refined sugar? A) ($134) B) ($32) C) $7 D) $39 69. Stinehelfer Beet Processors, Inc., processes
sugar beets in batches. A batch of sugar beets costs $56 to buy from farmers
and $13 to crush in the company’s plant. Two intermediate products, beet fiber
and beet juice, emerge from the crushing process. The beet fiber can be sold as
is for $24 or processed further for $12 to make the end product industrial
fiber that is sold for $31. The beet juice can be sold as is for $43 or
processed further for $29 to make the end product refined sugar that is sold
for $91. How much profit (loss) does the company make by processing the
intermediate product beet juice into refined sugar rather than selling it as
is? A) $19 B) $6 C) ($50) D) ($16) 70. Paine Corporation processes sugar beets in
batches that it purchases from farmers for $72 a batch. A batch of sugar beets
costs $11 to crush in the company’s plant. Two intermediate products, beet
fiber and beet juice, emerge from the crushing process. The beet fiber can be
sold as is for $27 or processed further for $16 to make the end product
industrial fiber that is sold for $40. The beet juice can be sold as is for $43
or processed further for $28 to make the end product refined sugar that is sold
for $100. Which of the intermediate products should be processed further? A) beet fiber should NOT be processed into
industrial fiber; beet juice should be processed into refined sugar B) beet fiber should NOT be processed into
industrial fiber; beet juice should NOT be processed into refined sugar C) beet fiber should be processed into
industrial fiber; beet juice should NOT be processed into refined sugar D) beet fiber should be processed into
industrial fiber; beet juice should be processed into refined sugar
