Chapter 1 – Overview of cost accounting

Ex 1-1. Cost Classification

Item No. DM DL FOH ADM SEL

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Ex 1-2

1. Committed costs 9. Opportunity costs

2. Direct labor 10 Out of pocket costs
3. Indirect costs 11 Sunk costs
4. Variable costs 12 Discretionary costs
5. Fixed costs 13 Selling expenses
6. Common costs 14 Costs
7. Capital expenditure 15 Distribution costs
8. Joint costs

Ex 1-3

No. Product costs Period costs No. Product costs Period costs
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5. / 20. n/a n/a
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8. / 23. n/a n/a
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 Chapter 1 – Overview of cost accounting

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Ex 1-4.

Miles traveled Maintenance costs

Hdigh 30,000 P18,750
Low 12,750 P17,100 12,000 is the lowest but
Difference 17,250 P1,650 It is not within relevant
VC per mile P1,650/17,250 = .09565 range

Total costs (High) P18,750.00

VC 30,000 x .09565 2,870 rounded
Fixed costs P15,880

Test Materials 1.

1. B 12. D 23. C
2. B 13. D 24. D
3. C 14. C 25. C
4. C 15. D 26. D
5. A 16. A 27. A
6. B 17. D 28. C
7. B 18. C 29. D
8. C 19. C 30. A
9. B 20. D 31. C
10 D 21. A 32. D
11 C 22. D 33 A

Test Materials 2.

1. T 6. T 11. F 16. F
2. T 7. F 12. T 17. F
3. F 8. F 13. F 18. F
4. F 9. F 14. F 19. T
5. F 10. F 15. T 20 F

Test Materials 3.

Direct Materials Direct Labor Manufacturing OH Period Costs

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 Chapter 1 – Overview of cost accounting

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