COST ACCOUNTING (1105)

Answers to activities and quizzes

Chapter 1
Activity 1

Problem 1 Problem 2
1. Direct materials 1. M

2. Indirect materials 2. S

3. Direct materials 3. M

4. Direct materials 4. S

5. Indirect materials 5. A

6. Direct materials 6. A

7. Indirect materials 7. S

8. A

9. S

Problem 3
1. F | P

2. F | I (VARIABLE)

3. V | I

4. F | I

5. V | P

6. F | I (VARIABLE)

COST ACCOUNTING (1105) 1

 7. F | I

8. F | P

9. F | P (INVENTORIABLE)

Problem 4

1. 7.77

2. 4,430.77

3. 51,046.15

Problem 5

COST ACCOUNTING (1105) 2

 Name 500 750 1,000
Total fixed cost P60,000 P60,000 P60,000
Total variable cost P25,000 P37,500 P50,000

Total cost 85,000 97,000 110,000

Fixed cost per replacement 25000 37500 50,000
Variable cost per replacement 50 50 50

Total cost per replacement 25,050 37,550 50,050

Problem 6
1. Prime cost = Raw material cost + Direct labor cost

2. Conversion cost = Manufacturing overhead + Direct labor

Compute:

1. Prime cost = 285,000 + 245,000 = 530,000

2. Conversion cost = (175,00 + 155,000) + 245,000 = 575,000

3. Total inventoriable cost = 245 + 285 + 175 + 155 = 860,000

4. Total period cost = 160,000 + 145,000 = 305,000

Problem 7
1. High-low method = Highest cost - lowest cost / Highest activity - lowest activity

210 - 145 / 5,475 - 3,975 = 1,500 / 65 = 23.077 (b) variable cost

(Variable rate per unit x units) + FC

3,975 = 23.077 x 145 + FC

3,975 - 3,346.165 = FC
FC = 628.84 (a)

COST ACCOUNTING (1105) 3

 2. 450 machine period

y = 628.84 + 23.077 (450)

628.84 + 10,384.65
= 11,013.49

Chapter 2
Activity 2
1. Fixed Cost

2. Variable Cost

3. Mixed Cost

4. Using least square method

1. Variable rate per machine hour = 7.769

5. Fixed cost = 4,430.77

6. If actual machine hours is 6,000

Cost function = y = b(X) + a

4,430.77 + 7.77 (6,000)

46,614 + 4,430.77 = 51,044.77

7. 1,280 - 320 / 140 - 20 = 960 / 120 = 8

8. 320 = (8 x 20) + FC
320 = 160 + FC

320 - 160 = FC

160 = FC

9. y = 8 (X) + 160

10. 8 (150) + 160 = 1,200 + 160 = 1,360

COST ACCOUNTING (1105) 4

 11. 9.14

12. 60

13. 955.72

14. 16.85

15. 14,162.50

16. y = 14,162.50 + 16.86 (X)

17. 14,162.50 + 16.86 (3,300) = 69,800.5

Chapter 3
Computation of COGS:

Beginning inventory
Plus: Net purchases

Total goods available for sale

Less: Ending inventory

Cost of Goods Sold

Long version:

Direct materials used

Add: Direct labor used

Add: Factory overhead

Total Manufacturing cost

Add: WIP, Beginning

Cost of Goods Put into Process

Less: WIP, Ending

Cost of Goods Manufactured

Add: FG, Beginning

COST ACCOUNTING (1105) 5

 Total Goods Available for Sale

Less: FG, Ending

Cost of Goods Sold

Problem 1
Direct materials used 67,500

Direct labor 90,210

Factory Overhead 112,762.5

TMC 270,382.5
WIP, Beg 25,500

WIP, End (27,000)

COGM 283,262.5

*Add these to the factory overhead:

Indirect materials = 7,500

Indirect labor = 6,790

Problem 2
Beg. materials 22,000

Purchases 100,000

End, materials (25,000)

DM used 97,000
Direct labor cost 80,000

Factory overhead 120,000

TMC 297,000

WIP, beg 25,800

COST ACCOUNTING (1105) 6

 WIP, end (18,000)
COGM 304,800

FG, beg 45,000

FG, end (24,000)

COGS 325,800

Problem 3
No beginning work in process or finished goods

FG, end = 30,000

Sold units = 95,000

Direct materials used = 225,000

Indirect materials = 75,000

Direct labor cost = 210,000

Indirect labor cost = 140,000
Factory overhead = 515,000

Required:

1. Cost of Goods Manufactured

DM, used 225,000

Direct labor cost 210,000
Factory overhead 515,000

COGM 950,000

2. Unit cost (cost per unit of goods manufactured)

Units cost = COGM / units

COST ACCOUNTING (1105) 7

 950,000 / 125,000 = 7.60

3. Prime cost

1. 225,000 + 210,000 = 435,000

4. Conversion cost

1. 515,000 + 210,000 = 725,000

5. 130,000

6. COGS

Quiz 1
1. M \ V

2. NM \ F

3. M \ F

4. M \ V

5. M \ V

6. M \ V

7. M \ F

8. M \ F

9. M \ F

10. M \ V

PART 2

1. TRUE

2. TRUE

3. TRUE

COST ACCOUNTING (1105) 8

 4. FALSE

5. TRUE

6. FALSE

7. TRUE (FALSE)

8. FALSE (TRUE)

9. TRUE

10. FALSE

PART 3

1. 40

2. 162,000

3. 462,000

4. 482,000

PART 4

1. 0.625

2. 2,392.5

3. 13,330

PART 5

DM = 300,000 ; DL = 400,000 ; FOH = 80,000 ; FIXED = 50,000

1. 700,000

2. 530,000

3. 830,000

PART 6

COST ACCOUNTING (1105) 9

 1. 270,000

2. 908.000

3. 960,000

4. 940,000

PART 7

1. 19,000

2. 56,000

3. 97,000

PART 8

1. 705,000

2. 780,000

3. 1,165,000

4. 222,000

PART 9

1. 27,000

2.

COST ACCOUNTING (1105) 10