What method of allocating joint processing will give the same gross profit rate to all products?
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Show Chapter 11--Allocation of Joint Costs and Accounting for By-Products TRUE/FALSE 1.Joint costs occur after the split-off point in a production process ANS:F 2.Joint costs occur before the split-off point in a production process ANS:T 3.Joint costs are allocated to by-products as well as primary products. ANS:F 4.The primary distinction between by-products and scrap is the difference in sales value. ANS:T 5.The primary distinction between by-products and scrap is the difference in volume produced. ANS:F 6.The point at which individual products are first identifiable in a joint process is referred to as the split- off point ANS:T 7.Joint costs include all materials, labor and overhead that are incurred before the split-off point. ANS:T 8.Two methods of allocating joint costs to products are physical measure allocation and monetary allocation. ANS:T 9. A decision that must be made at split-off is to sell a product or process it further. ANS:T 10.Allocating joint costs based upon a physical measure ignores the revenue-generating ability of individual products. ANS:T 11.Allocating joint costs based upon a physical measure considers the revenue-generating ability of individual products. ANS:F journal article Accounting for Joint CostsThe Accounting Review Vol. 26, No. 2 (Apr., 1951) , pp. 232-238 (7 pages) Published By: American Accounting Association https://www.jstor.org/stable/240223 Read and download Log in through your school or library Subscribe to JPASS Unlimited reading + 10 downloads
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Journal Information The Accounting Review is the premier journal for publishing articles reporting the results of accounting research and explaining and illustrating related research methodology. The scope of acceptable articles embraces any research methodology and any accounting-related subject. The primary criterion for publication in The Accounting Review is the significance of the contribution an article makes to the literature. Publisher Information The American Accounting Association is the world's largest association of accounting and business educators, researchers, and interested practitioners. A worldwide organization, the AAA promotes education, research, service, and interaction between education and practice. Formed in 1916 as the American Association of University Instructors in Accounting, the association began publishing the first of its ten journals, The Accounting Review, in 1925. Ten years later, in 1935, the association changed its name to become the American Accounting Association. The AAA now extends far beyond accounting, with 14 Sections addressing such issues as Information Systems, Artificial Intelligence/Expert Systems, Public Interest, Auditing, taxation (the American Taxation Association is a Section of the AAA), International Accounting, and Teaching and Curriculum. About 30% of AAA members live and work outside the United States. Rights & Usage This item is part of a JSTOR Collection. What method is most commonly used for allocating joint processing costs to joint products?The two major methods of allocating joint costs are (1) the net realizable value method and (2) the physical quantities method. The net realizable value method allocates joint costs to products based on their net real- izable values at the split-off point.
What are common methods for allocating joint costs?Three methods of allocating joint product costs are the physical units method, the market value method, and the net realizable method. The constant gross margin percentage method is also used to allocate joint cost.
What is the typical approach to allocating joint product costs to products?Two methods are commonly used to allocate these joint costs to the joint products: the physical quantities method and the sales value method.
What is market value method in joint product?Market value is also a relatively straightforward method of common cost apportionment when the joint products can be sold at the split-off point. The output of each product is multiplied by their selling price at the split-off point to provide the respective weighting to be applied to the common costs.
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