1. These are costs that vary according to the amount of work done. They include costs like packaging, shipping and processing costs.____________________ 2. These are costs that do not vary according to the amount of work done. They include expenses like depreciation and salaries.________________________ 3. These are costs associated with the day-to-day running of the business.________________________ 4. These are the costs related to producing and acquiring the product. They include things like labour costs and electricity costs.______________________ 5. Cost used to produce an items such as the materials, salary and other cost to enhance the product.________________________ 6. Cost not related to production but essential to operate the working area.___________________ 7. These are not directly accountable to a cost object, such as a particular function or product. _______________ 8. The direct cost of a commodity in terms of the materials and labor involved in its production, 9. a term used in cost accounting that represents the combination of direct labor costs and manufacturing overhead costs 10. the aggregate amount of cost incurred by a business to produce goods in a reporting period. This is composed of materials, labour cost and overhead.
II. Classification of cost
Variable or Fix
1. Paper to make a book
2. Machine Depreciation 3. Insurance of a building 4. Wiring for a radio 5. Sales Commission 6. Bottles used in making Coke 7. Operator’s hourly wages 8. Rent for the factory 9. President’s Salary 10. Travel expense of salesman
III. Classification of Cost
Identify if Product or Period Cost
1. Glue used to make a book
2. Office Building Depreciation 3. Insurance of a building 4. Magnet attached for a radio 5. Sales Commission 6. Dishwashing liquid used in making restaurant 7. Operator’s hourly wages 8. Rent for the factory 9. President’s Allowance 10. Travel expense of salesman IV. Classification of Cost
Direct Material, Direct Labor Overhead
1. Metal used in making table
2. Insurance of the machines 3. Leather used in making sofa bed 4. Wages paid to machine operators 5. Depreciation of factory machine 6. Sandpaper, bolts, and nails 7. Plastic in bottles water 8. Advertising of the company 9. Freight in of materials purchased 10. Property tax
V. Product Cost Computation
Buns used for burger 4,500
Onions, tomatoes 500 Mayonnaise 340 Salary of Chef 2,400 Ketchup 120 Cellophane for packaging 500 Delivery fee to buyer 120 Sesame seeds 230 Salary of Delivery boy 4,500 Oil 120 Gas 780
Compute the total product cost and period cost for this production. Compute the Variable Product Cost, Compute the fixed Product Cost
Months Cost Units Produced
January 450,000 5,000 February 1,000,000 6,000 March 340,000 2,500 April 120,000 3,000 May 8,200,000 90,000 June 860,000 9,000 July 500,000 8,800
Compute the Variable cost per unit
Compute the Monthly fix Cost Compute the total cost if 9,500 will be produced
VI. Prepare the Journal Entries for the following transaction
1. Purchased 50,000 direct material. 2. Materials used 35,000 3. Salary paid to Operator 4,500 4. Salary paid to delivery man 500 5. Depreciation of machine 5,600 6. Utilities paid 3,900 7. Unpaid Electricity bills 3,000 8. Paints for finishing touches 500