Reference no: EM132742257

Problem 1: Which of the following costs of a joint process would be allocated to the joint products?

a. materials, labor, and overhead

b. labor and overhead only

c. materials and labor only

d. conversion costs less by-product values

e. prime costs less by-product values

Problem 2: The following statement that best describes cost allocation is:

a. a company, as a general rule, should allocate indirect costs randomly or based on an "ability-to-bear" criterion

b. a company can affect total income the most strongly by using the algebraic method of allocating indirect costs

c. a company can maximize or minimize total company income by selecting different bases on which to allocate indirect costs

d. a company should select an allocation base to raise or lower reported income on given products

e. a company's total income will remain unchanged no matter how indirect costs are allocated