Question

Q26. In joint process, outputs with a negative sales value are: a) added to cost of goods sold b) added to joint production costs and allocated to joint or main products c) added to joint production costs and allocated to byproducts and scrap d) subtracted from product revenue Q27. Which of the following statements is true? a) Expenses are not usually separated into variable and fixed elements in externally reported income statements. b) Even if there is no change in units sold, selling price, or cost structure, a company can increase its absorption costing net operating income from one year to the next just by producing more units. c) When finished goods inventory decreases during a period, a manufacturing company's absorption costing net operating income for that period will usually be greater than its variable costing net operating income. d) Both A and B above. Q28. Lakeside Nursing Home has two operating departments, Custodial Care and Rehabilitation. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are charged to the operating departments on the basis of labor-hours. Data for September follow: Budgeted labor-hours........ Custodial Care Rehabilitation Actual labor-hours............ 3,000 1,000 3,200 1,600 The budgeted costs of the Housekeeping Department for September were $24,000 and the actual costs were $29,760. How much of the actual Housekeeping Department costs for September should not be charged to the operating departments for performance evaluation purposes? a) $960 b) $5,760 c) $0 d) $1,240

Q26. In joint process, outputs with a negative sales value are:
a) added to cost of goods sold
b) added to joint production costs and allocated to joint or main products
c) added to joint production costs and allocated to byproducts and scrap
d) subtracted from product revenue
Q27. Which of the following statements is true?
a) Expenses are not usually separated into variable and fixed elements in externally
reported income statements.
b) Even if there is no change in units sold, selling price, or cost structure, a company can
increase its absorption costing net operating income from one year to the next just by
producing more units.
c) When finished goods inventory decreases during a period, a manufacturing company's
absorption costing net operating income for that period will usually be greater than its
variable costing net operating income.
d) Both A and B above.
Q28. Lakeside Nursing Home has two operating departments, Custodial Care and
Rehabilitation. It also has a Housekeeping Department that serves the two operating
departments. The costs of the Housekeeping Department are all variable and are charged to the
operating departments on the basis of labor-hours. Data for September follow:
Budgeted labor-hours........ Custodial Care Rehabilitation
Actual labor-hours............ 3,000 1,000
3,200 1,600
The budgeted costs of the Housekeeping Department for September were $24,000 and the
actual costs were $29,760.
How much of the actual Housekeeping Department costs for September should not be charged
to the operating departments for performance evaluation purposes?
a) $960
b) $5,760
c) $0
d) $1,240

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