Problem 1 Problem 2 1. Direct 9. Direct 1. Manufacturing 6. Manufacturing 2. Indirect 10.Direct 2. Selling 7. Administrative 3. Direct 11.Indirect 3. Manufacturing 8. Selling 4. Direct 12.Direct 4. Selling 9. Administrative 5. Direct 13.Direct 5. Administrative 10.Selling 6. Direct 14.Direct 7. Direct 15.Indirect 8. Indirect
Problem 3 1. Variable Product Direct 2. Variable Product Direct 3. Fixed Product Indirect 4. Variable Product Direct 5. Fixed Product Indirect 6. Fixed Period Indirect 7. Fixed Period Indirect 8. Variable Period Direct 9. Fixed Product Indirect 10.Fixed Period Indirect
Problem 4 Bug Company 1. Fixed Period 6. Variable Period 2. Fixed Inventoriable 7. Variable Inventoriable 3. Fixed Inventoriable 8. Fixed Inventoriable 4. Variable Inventoriable 9. Fixed Period 5. Fixed Inventoriable 10. Fixed Inventoriable
Problem 5 Mighty Muffler, Inc. a. P 60,000 b. P 60,000 c. P 37,500 = P50/muffler x 500 = P 25,000 750 d. P 50 x 1,000 = P 50,000 e. P 60,000 + P 25,000 = P 85,000 f. P 60,000 + P 50,000 = P 110,000 g. P 60,000/ 500 = P 120 h. P 60,000/750 = P 80 I, P 60,000/1,000 = P 60 j. P 50 k. P 50 l. P 50 m. P 120 + P 50 = P 170 n. P 80 + P 50 = P 130 o. P 60 + P 50 = P 110
Problem 6 JP Morgan 1. b, c. i 2. a, c, i 3. a, c, i 4. a, c. h 5. b. d, i 6. g 7. e, f (correction should be when one additional loan application is processed) 8. b, d, i 9. a, c, i 10. b, c,
Problem 7 Mother Goose Company 1. Prime costs - 530,000 2. Conversion cost - 575,000 3 Inventoriable cost - 860,000 4. Total period costs - 305,000
Problem 8 a. c - fixed (total amount is constant) b. a variable (4,480/3,200 = 1.40; 6,300/4,500 = 1.40 per unit is constant) c. d - mixed ( 3,950/3,200 = 12.34; 5,250/4,500 = 1.16) total amount and amount per unit varies in relation to units sold)
Problem 9 - Blanche Corporation ` 1. Direct materials used P 32.00 Direct labor 20.00 Variable manufacturing overhead 15.00 Variable marketing 3.00 Total variable cost per unit 70.00 X No. of units produced and sold 12,000 Total variable costs per month P 840,000
2. Fixed manufacturing overhead P 6.00 Fixed marketing costs 4.00 Total fixed cost per unit 10.00 X No. of units produced and sold 12,000 Total fixed costs per month P 120,000
Problem 10 1. Direct materials P 60.00 Direct labor 30.00 Variable manufacturing overhead 9.00 Total variable manufacturing cost per unit P 99.00
` 2. Total variable manufacturing cost per unit P 99.00 Variable marketing and administrative 6.00 Total variable costs per unit 105.00
3. Total variable manufacturing cost per unit P 99,00 Fixed manufacturing overhead (30,000/1,200) 25.00 Full manufacturing cost per unit 124.00
4. Full manufacturing cost per unit 124.00 Variable marketing and administrative 6.00 Fixed marketing and administrative 20.00 Full cost to make and sell per unit 150.00
Problem 11 Johnson Corporation
1. Variable cost per machine hour = 35,600 20,000 4,000 - 2,000 = 7.80 per machine hour
2. 4,000 hours 2000 hours Total electricity expense 35,600 20,000 Less: Variable costs ( 4,000 x 7.80) 31,200 ( 2000 x 7.80) ______ 15,600 Fixed cost 4,400 4,400
Problem 12 Valdez Motors Co. 1. Variable cost per machine hour = 5,475 3,975 210 - 145 = 23.08 per machine hour
2. 210 hours 145 hours Total overhead costs 5,475 3,975 Less: Variable costs ( 210 x 23.08) 4,847 ( 145 x 23.08) _____ 3,347 Fixed cost 628 628
Problem 13 Department A Department B 1. Direct materials P 800,000 P 1,200,000 Direct labor 600,000 660,000 Factory supplies 20,000 60,000 Direct variable costs P 1,420,000 P 1,920,000
2. Controllable direct fixed costs Supervisory salaries P 48,000 P 72,000
3. Uncontrollable direct fixed costs: Depreciation machinery and Equipment P 140,000 P 220,000
4. Controllable direct fixed cost P 48,000 P 72,000 Uncontrollable direct fixed cost 140,000 220,000 Total direct fixed cost P 188,000 P 292,000
5. Allocated costs from headquarters P 130,000 P 190,000 Allocated repairs & maintenance 75,000 175,000 Allocated factory rent bldg. 40,000 160,000 Allocated plant executives salaries 152,000 228,000 Total indirect costs P 397,000 P 753,000
6. Allocated costs from headquarters P 130,000 P 190,000 Allocated factory rent bldg. 40,000 160,000 Allocated plant executives salaries 152,000 228,000 Depreciation- mach. & equipment 140,000 220,000 Total unavoidable costs P 462,000 P 798,000
Multiple choice 1. B 11. C 21. A 2. C 12. A 22. C 3. B 13. C 23. A 4. C 14. B 24. C 5. D 15. A 25. B 6. A 16. B 26. B 7. D 17. B 27. A 8. D 18. A 28. B 9. B 19. D 29. C 10. C 20. B 30. B