Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 14, Problem 18RQ
Are allocated joint
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Are allocated joint processing costs relevant when making a decision to sell a joint product at the split-off point or process it further? Why?
Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision.
What is the decision rule in deciding whether to sell a product or process it further?
A decision that involves potential further processing of joint products is which kind of decision?
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Chapter 14 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 14 - Prob. 1RQCh. 14 - Describe the managerial accountants role in the...Ch. 14 - Distinguish between qualitative and quantitative...Ch. 14 - Prob. 4RQCh. 14 - A quantitative analysis enables a decision maker...Ch. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Is the book value of inventory on hand a relevant...Ch. 14 - Why might a manager exhibit a behavioral tendency...
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Briefly describe the proper approach for making a...Ch. 14 - Prob. 17RQCh. 14 - Are allocated joint processing costs relevant when...Ch. 14 - Briefly describe the proper approach to making a...Ch. 14 - What is meant by the term contribution margin per...Ch. 14 - How is sensitivity analysis used to cope with...Ch. 14 - There is an important link between decision making...Ch. 14 - List four potential pitfalls in decision making,...Ch. 14 - Why can unitized fixed costs cause errors in...Ch. 14 - Prob. 25RQCh. 14 - Prob. 26RQCh. 14 - Are the concepts underlying a relevant-cost...Ch. 14 - Prob. 28RQCh. 14 - Redo Exhibit 144 without the irrelevant data.Ch. 14 - Valley Pizzas owner bought his current pizza oven...Ch. 14 - Lamont Industries produces chemicals for the...Ch. 14 - Day Street Delis owner is disturbed by the poor...Ch. 14 - Prob. 35ECh. 14 - Intercontinental Chemical Company, located in...Ch. 14 - Intercontinentals special order also requires...Ch. 14 - Fusion Metals Company is considering the...Ch. 14 - Prob. 39ECh. 14 - Zytel Corporation produces cleaning compounds and...Ch. 14 - Duo Company manufactures two products, Uno and...Ch. 14 - Refer to the data given in the preceding exercise...Ch. 14 - Southern California Chemical Company manufactures...Ch. 14 - Kitchen Magician, Inc. has assembled the following...Ch. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Tipton One-Stop Decorating sells paint and paint...Ch. 14 - Carpenters Mate, Inc. manufactures electric...Ch. 14 - Casting Technology Resources (CTR) has purchased...Ch. 14 - The Midwest Division of the Paibec Corporation...Ch. 14 - Prob. 51PCh. 14 - Prob. 52PCh. 14 - Upstate Mechanical, Inc. has been producing two...Ch. 14 - Chenango Industries uses 10 units of part JR63...Ch. 14 - Miami Industries received an order for a piece of...Ch. 14 - Prob. 56PCh. 14 - Ozark Industries manufactures and sells three...Ch. 14 - Prob. 58PCh. 14 - Deru Chocolate Company manufactures two popular...Ch. 14 - Prob. 60PCh. 14 - Prob. 61PCh. 14 - Bo Vonderweidt, the production manager for...Ch. 14 - Alberta Gauge Company, Ltd., a small manufacturing...
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- If the minimum transfer price of the selling division is less than the maximum transfer price of the buying division, the intermediate product should be transferred internally. Do you agree or disagree? Why?arrow_forwardIn the sell-or-process-further decision,a. joint costs are always relevant.b. total costs of joint processing and further processing are relevant.c. all costs incurred prior to the split-off point are relevant.d. the most profitable outcome may be to further process some separately identifiable products beyond the split-off point, but sell others at the split-off point.e. None of thesearrow_forwardWhat should be considered when deciding whether a joint product should be sold at the split-off point or processed further?arrow_forward
- Which of the following statements is true? An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision. It is profitable to continue processing joint products after the split-off point if their total revenues exceed the joint costs. Â Which of the following statements is true? Consistency demands that a cost that is relevant in one decision be regarded as relevant in other decisions as well. Variable costs are always relevant costs in decisions.arrow_forwardUsing a physical measurement method, what amount of joint processing cost is allocated to product B? Using sales value at split-off, what amount of joint processing cost is allocated to Product B?arrow_forwardWhich of the following methods allocates joint costs based on the potential market value at the point where the products will be separated to be processed further? a.net realizable value method b.weighted average method c.market value at split-off method d.physical units methodarrow_forward
- What guideline should be used in determining whether a joint product should be sold at the split-off point or processed further?arrow_forwardIn which scenario would an adjusted sales value be used to assign costs? a. If abnormal losses occur during production of joint products b. If a joint product is to be processed further after the point of separation c. If one of the joint products has negligible market value d. If joint products are separately identifiable before split-off pointarrow_forwarda) Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision. b) What is the decision rule in deciding whether to sell a product or process it further?arrow_forward
- How would you decide how to allocate indirect costs to the divisions? Why?arrow_forwardWhy might the number of products in a joint cost situation differ from the number of outputs?arrow_forwardManagers must decide whether a product should be sold at splitoff or processed further. The sales value at splitoff method of joint-cost allocation is the best method for generating the information managers need for this decision.” Do you agree? Explain.arrow_forward
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Incremental Analysis - Sell or Process Further; Author: Melissa Shirah;https://www.youtube.com/watch?v=7D6QnBt5KPk;License: Standard Youtube License