Reference no: EM132602843

Question 1. Which statement is true regarding the sales method of accounting for byproducts?

a. This method makes a journal entry to reduce the cost of the main product(s)

b. This method is the preferred method because of the matching principle

c. Revenues of the byproduct can be recorded in the income statement as revenue when produced

d. No value is attached to the byproduct inventory

Question 2. The Bonawitz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:

Budgeted costs of operating the copying facility for 200,000 to 300,000 copies:

Fixed costs per year $30,000

Variable costs 3 cents (.03) per copy

Budgeted long-run usage in copies per year:

Marketing Department 60,000 copies

Operations Department 190,000 copies

Actual usage for the year by the Marketing Department was 40,000 copies and by the Operations Department was 180,000 copies. Actual cost per copy was 3.5 cents (.035).

If a dual-rate cost allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Use the application methodology that best measures the responsible use of the copying facility's services..

a. $29,100

b. $29,450

c. $28,500

d. $28,200