Cost Accounting Chapter 2 - Costs Concepts and classification

Problem 1 1. Direct 2. Indirect #. Direct %. Direct '. Direct Problem # 1. )ariable 2. )ariable #. *i+ed %. )ariable '. *i+ed 6. *i+ed . *i+ed $. )ariable &. *i+ed 1(.*i+ed 6. Direct . Direct $. Indirect &. Direct 1(.Direct Product Product Product Product Product Period Period Period Product Period Problem 2 1. Manufacturing 2. !elling #. Manufacturing %. !elling '. Administrati"e Direct Direct Indirect Direct Indirect Indirect Indirect Direct Indirect Indirect 6. )ariable . )ariable $. *i+ed &. *i+ed 1(. *i+ed Period In"entoriable In"entoriable Period In"entoriable '(/((( 6(/((( 11(/((( 6(/((( %%/((( 1(%/((( '(/((( 6(/((( %%/((( 1'%/((( %#(/((( '2'/((( 1(/((( #('/((( 6. Manufacturing . Administrati"e $. !elling &. Administrati"e 1(.!elling

Problem % ,ug Compan1. *i+ed Period 2. *i+ed In"entoriable #. )ariable In"entoriable %. )ariable In"entoriable '. *i+ed In"entoriable

Problem ' .ounin Manufacturing Compan1. Direct materials Direct labor Prime cost 2. Direct labor *0 11(/((( 2 &/((( 22'(((3 Con"ersion costs Direct materials Direct labor *actor- o"erhead Product costs

#.

Problem 6 Mother 4oose Compan1. Prime costs 2. Con"ersion cost # In"entoriable cost %. 5otal period costs Problem ,lanche Corporation

1. Direct materials used Direct labor )ariable manufacturing o"erhead )ariable mar7eting 5otal "ariable cost per unit 8 9o. of units produced and sold 5otal "ariable costs per month 2. *i+ed manufacturing o"erhead *i+ed mar7eting costs 5otal fi+ed cost per unit 8 9o. of units produced and sold 5otal fi+ed costs per month

P #(.(( 2(.(( 1'.(( #.(( 6$.(( 2(/((( P 1/#6(/((( P 1(.(( %.(( 1%.(( 2(/((( P 2$(/(((

Page 2 Chapter 2 Prblem $ 1. Direct materials Direct labor )ariable manufacturing o"erhead 5otal "ariable manufacturing cost per unit 6 2. 5otal "ariable manufacturing cost per unit )ariable mar7eting and administrati"e 5otal "ariable costs per unit #. 5otal "ariable manufacturing cost per unit *i+ed manufacturing o"erhead 1#(/(((:1/2((3 *ull manufacturing cost per unit %. *ull manufacturing cost per unit )ariable mar7eting and administrati"e *i+ed mar7eting and administrati"e *ull cost to ma7e and sell per unit Problem & - Chi; Manufacturing Compan1. Materials put into production Direct labor Prime costs 2. Direct labor *actor- o"erhead Indirect materials Indirect labor 0ther o"erhead cost 5otal con"ersion costs #. Direct materials

P 6(.(( #(.(( &.(( P &&.(( P &&.(( 6.(( 1('.(( P &&/(( 2'.(( 12%.(( 12%.(( 6.(( 2(.(( 1'(.(( P &(/((( &'/((( P 1$'/((( &'.(((

6(/((( 2'/((( 6(/(((

1%'/((( 2%(/((( &(/(((

Direct labor *actor- o"erhead 5otal product costs %. none

&'/((( 1%'/((( ##(/(((

Problem 1( <ohnson Corporation 1. )ariable cost per machine hour = #'/6(( 2(/(((

%/((( - 2/(((
= .'( per machine hour 2. 5otal electricit- e+pense >ess? )ariable costs 1 %/((( + .'(3 1 2((( + .'(3 *i+ed cost #. *i+ed cost )ariable cost 1 6/((( + .'(3 5otl manufacturing costs %/((( hours #'/((( #(/((( @@@@@@ '/((( 2((( hours 2(/((( 1'/((( '/((( '/((( %'/((( '(/(((

Problem 11 )alde; Motors Co. 1. )ariable cost per machine hour = '/% ' #/& ' 21( - 1%' = 2#.($ per machine hour 2. 5otal o"erhead costs >ess? )ariable costs 1 21( + 2#.($3 1 1%' + 2#.($3 *i+ed cost Page # Problem 12 <ustine Compan1 )ariable cost per hour = %/% ( 2/$2( '2( - #(( = .'( per hour 2. 5otal >ess? )ariable cost '2( + .'( #(( + .'( *i+ed cost #. 5otal cost = P ' ( 2 P /'( 8 '2( hours %/% ( #/&(( @@@@@ ' ( #(( hours 2/$2( 2/2'( ' ( 21( hours '/% ' %/$% @@@@@ 62$ 1%' hours #/& ' #/#% 62$

%.

*i+ed cost )ariable 1 %2( hrs. + P .'(3 5otal maintenance cost

' ( #/1'( P #/ 2(

5rue:*alse Auestions 1. *alse 6. 5rue 2. *alse . *alse #. 5rue $. 5rue %. *alse &. *alse '. *alse 1(. 5rue Multiple choice 5heor1. , 6. A 2. C .D #. , $. D %. C &. , '. D 1(. C Multiple choice Problems 1. A 6. A 2. , .C #. C $. C %. C &. A '. , 1(. C

11. *alse 12. *alse 1#. 5rue 1%. *alse 1'. *alse

16. 5rue 1 . *alse 1$. 5rue 1&. *alse 2(. 5rue

11. C 12. A 1#. C 1%. , 1'. ,

16. , 1 ., 1$. A 1&. D 2(. ,

11. A 12. , 1#. , 1%. C 1'. ,

16. A 1 ., 1$. D 1&. A 2(. A