Isthmus Corporation Uses the Physical-Units Method to Allocate Costs Among

question 45

Multiple Choice

Isthmus Corporation uses the physical-units method to allocate costs among its three joint products: X,Y,and Z.The following data are available for the period just ended:
Joint processing cost: $800,000
Total production: 150,000 pounds
Share of joint cost allocated to X: $160,000
Share of joint cost allocated to Y: $400,000
Which of the following statements is true?

• A)The company would have relied on the sales value of each product when allocating joint costs to X,Y,and Z.
• B)Ithaca produced 30,000 pounds of Z during the period.
• C)Ithaca produced 45,000 pounds of Z during the period.
• D)Ithaca produced 105,000 pounds of Z during the perioD.
• E)Based on the data presented,it is not possible to determine Ithaca's production of Z during the period.

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Definitions:

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NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, comparing the value of all cash inflows and outflows over time, discounted back to their present value.

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