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P1 Questions and Answers

Question # 1

Which of the statements about allocation of joint costs to products are true and which are false?

Question # 2

The following 5 statements apply the principles of either, both or neither absorption costing and marginal costing.

Place the option labels against the relevant statements.

Question # 3

The standard output from a joint process is 4,000 litres of Product K, 6,000 litres of Product L and 3,000 litres of Product M.

The total cost of the joint process is $147,000.

The company is now deciding if it should further process Product L.

In the further processing decision the best way to apportion the joint costs to the products is:

A.

in the ratio of 4:6:3.

B.

in the ratio of the sales value at the split-off point.

C.

in the ratio of the sales value after further processing.

D.

it is not necessary to allocate joint costs in a further processing decision.

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