Cost Accounting

Chapter 2 - Costs Concepts and classification

Problem 1 Problem 2
1. Direct 6. Direct 1. Manufacturing 6. Manufacturing
2. Indirect 7. Direct 2. Selling 7. Administrative
3. Direct 8. Indirect 3. Manufacturing 8. Selling
4. Direct 9. Direct 4. Selling 9. Administrative
5. Direct 10.Direct 5. Administrative 10.Selling

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. Variable Inventoriable 8. Fixed Inventoriable
4. Variable Inventoriable 9. Fixed Period
5. Fixed Inventoriable 10. Fixed Inventoriable

Problem 5 Rounin Manufacturing Company

1. Direct materials 50,000
Direct labor 60,000
Prime cost 110,000

2. Direct labor 60,000

FO (10,000 + 9,000 +25000) 44,000
Conversion costs 104,000

3. Direct materials 50,000

Direct labor 60,000
Factory overhead 44,000
Product costs 154,000

Problem 6 Mother Goose Company

1. Prime costs - 430,000
2. Conversion cost - 525,000
3 Inventoriable cost - 710,000
4. Total period costs - 305,000

Problem 7 Blanche Corporation

` 1. Direct materials used P 30.00
Direct labor 20.00
Variable manufacturing overhead 15.00
Variable marketing 3.00
Total variable cost per unit 68.00
X No. of units produced and sold 20,000
Total variable costs per month P 1,360,000

2. Fixed manufacturing overhead P 10.00

Fixed marketing costs 4.00
Total fixed cost per unit 14.00
X No. of units produced and sold 20,000
Total fixed costs per month P 280,000

Page 2 Chapter 2
Prblem 8
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 unitP 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 9 - Chiz Manufacturing Company

1. Materials put into production P 90,000
Direct labor 95,000
Prime costs P 185,000

2. Direct labor 95.000

Factory overhead
Indirect materials 60,000
Indirect labor 25,000
Other overhead cost 60,000 145,000
Total conversion costs 240,000

3. Direct materials 90,000

 Direct labor 95,000
Factory overhead 145,000
Total product costs 330,000

4. none

Problem 10 Johnson Corporation

1. Variable cost per machine hour = 35,600 20,000
4,000 - 2,000
= 7.50 per machine hour

2. 4,000 hours 2000 hours

Total electricity expense 35,000 20,000
Less: Variable costs
( 4,000 x 7.50) 30,000
( 2000 x 7.50) ______ 15,000
Fixed cost 5,000 5,000

3. Fixed cost 5,000

Variable cost ( 6,000 x 7.50) 45,000
Totl manufacturing costs 50,000

Problem 11 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

Page 3
Problem 12 Justine Company

1 Variable cost per hour = 4,470 2,820

520 - 300

= 7.50 per hour

2. 520 hours 300 hours

Total 4,470 2,820
Less: Variable cost
520 x 7.50 3,900
300 x 7.50 _____ 2,250
Fixed cost 570 570

3. Total cost = P 570 + P7,50 X

4. Fixed cost P 570
Variable ( 420 hrs. x P 7.50) 3,150
Total maintenance cost P 3,720

True/False Questions
1. False 6. True 11. False 16. True
2. False 7. False 12. False 17. False
3. True 8. True 13. True 18. True
4. False 9. False 14. False 19. False
5. False 10. True 15. False 20. True

Multiple choice Theory

1. B 6. A 11. C 16. B
2. C 7. D 12. A 17. B
3. B 8. D 13. C 18. A
4. C 9. B 14. B 19. D
5. D 10. C 15. B 20. B

Multiple choice Problems

1. A 6. A 11. A 16. A
2. B 7. C 12. B 17. B
3. C 8. C 13. B 18. D
4. C 9. A 14. C 19. A
5. B 10. C 15. B 20. A