NAME: __________________ Score: ________________

QUIZ IN STRATEGIC COST MANAGEMENT

Use the following information for questions 1–9.

P.O.P. Co. produces two products from a joint process: X and Z. Joint
processing costs for this production cycle are $8,000.

Disposal
Sales price cost per Further Final sale
per yard at yard at processing price per
Yards split-off split-off per yard yard
X 1,500 $6.00 $3.50 $1.00 $ 7.50
Z 2,200 9.00 5.00 3.00 11.25

If X and Z are processed further, no disposal costs will be incurred or

such costs will be borne by the buyer.

1. Using a physical measure, what amount of joint processing cost is

allocated to X (round to the nearest dollar)?
a. $4,000
b. $4,757
c. $5,500
d. $3,243

2. Using a physical measure, what amount of joint processing cost is

allocated to Z (round to the nearest dollar)?
a. $4,000
b. $3,243
c. $5,500
d. $4,757

3. Using sales value at split-off, what amount of joint processing cost

is allocated to X (round to the nearest dollar)?
a. $5,500
b. $2,500
c. $4,000
d. $3,243

4. Using sales value at split-off, what amount of joint processing cost

is allocated to Z (round to the nearest dollar)?
a. $5,500
b. $4,000
c. $2,500
d. $4,757

5. Using net realizable value at split-off, what amount of joint

processing cost is allocated to X (round to the nearest dollar)?
a. $4,000
b. $5,610
c. $2,390
d. $5,500

6. Using net realizable value at split-off, what amount of joint

processing cost is allocated to Z (round to the nearest dollar)?
a. $5,500
b. $4,000
c. $2,390
d. $5,610
Page 1 of 4
 7. Using approximated net realizable value at split-off, what amount of
joint processing cost is allocated to X (round to the nearest dollar)?
a. $3,090
b. $5,204
c. $4,000
d. $2,390

8. Using approximated net realizable value at split-off, what amount of

joint processing cost is allocated to Z (round to the nearest dollar)?
a. $2,796
b. $4,910
c. $4,000
d. $2,390

9. Which products would be processed further?

a. only X
b. only Z
c. both X and Z
d. neither X or Z

Use the following information for questions 10–15.

Tiny Co. produces three products: Bo, Mo, and Lo from the same process.
Joint costs for this production run are $2,100.

Disposal
Sales pricecost per Further Final
per lb. at lb. at processingsales price
Pounds split-offsplit-off per pound per pound
Bo 800 $6.50 $ 3.00 $2.00 $ 7.50
Mo 1,100 8.25 4.20 3.00 10.00
Lo 1,500 8.00 4.00 3.50 10.50

If the products are processed further, Tiny Co. will incur the following
disposal costs upon sale: Bo, $3.00; Mo, $2.00; and Lo, $1.00.
10. Using a physical measurement method, what amount of joint processing
cost is allocated to Bo (round to the nearest dollar)?
a. $700
b. $679
c. $927
d. $494
11. Using a physical measurement method, what amount of joint processing
cost is allocated to Mo (round to the nearest dollar)?
a. $494
b. $679
c. $927
d. $700
12. Using sales value at split-off, what amount of joint processing cost
is allocated to Mo (round to the nearest dollar)?
a. $700
b. $416
c. $725
d. $959
13. Using sales value at split-off, what amount of joint processing cost
is allocated to Lo (round to the nearest dollar)?
a. $959
b. $725
c. $700
d. $416

Page 2 of 4
 14. Using net realizable value at split-off, what amount of joint
processing cost is allocated to Bo (round to the nearest dollar)?
a. $706
b. $951
c. $700
d. $444

15. Using net realizable value at split-off, what amount of joint

processing cost is allocated to Lo (round to the nearest dollar)?
a. $706
b. $951
c. $444
d. $700

Use the following information for questions 16 and 17.

DED Co. is placing an ad in the local paper to advertise its products. The
ad will run for one week at a total cost of $5,500. DED has four categories
of products as follows:

% of floor space Expected sales

occupied value
Hardware 20% $35,000
Hand Tools 15 15,000
Lawn Furniture 45 64,500
Light Fixtures 20 25,500

16. What amount of advertising cost should be allocated to hardware,

assuming DED allocates based on percent of floor space occupied?
a. $1,375
b. $1,100
c. $2,475
d. $ 825

17. Assume that DED decides to allocate based on expected sales value.
What amount of advertising cost should be allocated to light fixtures
(round to the nearest dollar)?
a. $1,375
b. $ 589
c. $1,002
d. $2,534

Use the following information for questions 18–23.

Rax produces four products from the same process: Cep, Dap, Eek, and Gok.
Joint product costs are $9,000. (Round all answers to the nearest dollar.)

Disposal Final
Sales price cost Further sales
per barrel per barrel processing price
Barrels at split-off at split-off costs per barrel
Cep 750 $10.00 $6.50 $2.00 $13.50
Dap 1,000 8.00 4.00 `2.50 10.00
Eek 1,400 11.00 7.00 4.00 15.50
Gok 2,000 15.00 9.50 4.50 19.50

If Rax sells the products after further processing, the following disposal
costs will be incurred: Cep, $2.50; Dap, $1.00; Eek, $3.50; Gok, $6.00.

Page 3 of 4
18. Using a physical measurement method, what amount of joint processing
cost is allocated to Dap?
a. $1,748
b. $2,447
c. $1,311
d. $3,495

19. Using a physical measurement method, what amount of joint processing

cost is allocated to Eek?
a. $3,495
b. $2,447
c. $1,748
d. $1,311

20. Using sales value at split-off, what amount of joint processing cost
is allocated to Dap?
a. $4,433
b. $2,276
c. $1,108
d. $1,182

21. Using sales value at split-off, what amount of joint processing cost
is allocated to Gok?
a. $4,433
b. $1,182
c. $1,108
d. $2,276

22. Using net realizable value at split-off, what amount of joint

processing cost is allocated to Cep?
a. $1,550
b. $1,017
c. $4,263
d. $2,170

23. Using net realizable value at split-off, what amount of joint

processing cost is allocated to Eek?
a. $1,017
b. $1,550
c. $2,170
d. $4,263

Page 4 of 4