66.Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Preon has a market value of $6.00 per gallon and Paron $2.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used.
A. $2,500.
B. $3,000.
C. $4,500.
D. $5,625.
E. $1,500.
67.Data pertaining to a company's joint production for the current period follows:
LM
Quantities produced200 lbs.150 lbs.
Market value at split-off point$8/lb.$16/lb.
Compute the cost to be allocated to Product L for this period's $660 of joint costs if the value basis is used.
A. $264.
B. $396.
C. $330.
D. $1,364.
E. $796.
68.Data pertaining to a company's joint production for the current period follows:
Quantities produced200 lbs.150 lbs.
Market value at split-off point$8/lb.$16/lb.
Compute the cost to be allocated to Product M for this period's $660 of joint costs if the value basis is used.
A. $264.
B. $396.
C. $330.
D. $1,364.
E. $796.
69.A lumber mill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used.
Type 1—400,000 bd. ft. priced to sell at $0.12 per bd. ft.
Type 2—400,000 bd. ft. priced to sell at $0.06 per bd. ft.
Type 3—200,000 bd. ft. priced to sell at $0.04 per bd. ft.
A. $16,000; $16,000.
B. $13,333; $4,444.
C. $40,000; $24,000.
D. $24,000; $12,000.
E. $24,000; $8,000.
1400,000$0.12/ft.$48,000 60%$24,000
2400,000$0.06/ft. 24,000 30% 12,000
3200,000$0.04/ft. 8,00010% 4,000
70.A lumber mill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows:
Grade ProductionMarket Price
Structural25,000 board feet$1,350/1,000 bd. ft.
No. 1 Common75,000 board feet$750/1,000 bd. ft.
No. 2 Common100,000 board feet $300/1,000 bd. ft.
Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common.
A. $0.
B. $17,500.
C. $23,333.
D. $35,000.
E. $70,000.
71.A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $240,000, and the following quantities of product and sales revenues were produced.
ProductPoundsPrice per Pound
Feed100,000$0.70
Flour50,0002.20
Starch20,0001.00
How much of the $240,000 cost should be allocated to feed?
A. $24,500.
B. $84,000.
C. $90,000.
D. $70,000.
E. $200,000.
72.Wren Pork Company uses the relative market value method of allocating joint costs in its production of pork products. Relevant information for the current period follows:
ProductPoundsPrice/lb.
Loin chops 3,000$5.00
Ground10,000 2.00
Ribs 4,000 4.75
Bacon 6,000 3.50
The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?
A. $0.
B. $5,909.
C. $8,600.
D. $10,750.
E. $43,000.
73.Calculating return on investment for an investment center is defined by the following formula:
A. Contribution margin/Ending assets.
B. Gross profit/Ending assets.
C. Net income/Ending assets.
D. Income/Average invested assets.
E. Contribution margin/Average invested assets.
74.Investment center managers are usually evaluated using performance measures
A. that combine income and assets.
B. that combine income and capital.
C. based on assets only.
D. based on income only.
E. that combine assets and capital.
75.Two investment centers at Marshman Corporation have the following current-year income and asset data:
Investment
Center AInvestment
Center B
Investment center income$415,000525,000
Investment center average invested assets$2,400,0001,950,000
The return on investment (ROI) for Investment Center A is:
A. 578.3%
B. 24.1%
C. 17.3%
D. 39.2%
E. 19.1%