Althea Marie M.

Lazo Exercise # 1
MD19-017498 Managerial Accounting

Problem # 1 Problem # 2
Classify the items into direct materials, Classify the following as either
direct labor, and manufacturing manufacturing (M), selling (S), or
overhead. administrative (A).

1. Metal used in manufacturing tables
 Direct Materials
2. Insurance on factory machines
 Manufacturing Overhead
3. Leather used in manufacturing
furniture
 Direct Materials
4. Wages paid to machine operators
 Direct Labor
5. Depreciation of factory machinery
 Manufacturing Overhead
6. Salaries of factory supervisors
 Manufacturing Overhead
7. Wood used in manufacturing furniture
 Direct Materials
8. Sandpaper, bolts, and nails
 Manufacturing overhead
9. Property taxes on factory building
 Manufacturing Overhead
10. Rent of factory building
 Manufacturing Overhead
1. Metal for the manufacture of golf clubs
 Manufacturing (M)
2. Wages of drivers delivering goods to
customers
 Selling (S)
3. Rent on factory building
 Manufacturing (M)
4. Freight-in of materials purchased
 Manufacturing (M)
5. President’s salary
 Administrative (A)
6. Cost of machine breakdown
 Manufacturing (M)
7. Power to operate factory equipment
 Manufacturing (M)
8. Advertising
 Selling (S)
9. Commission paid to sales personnel
 Selling (S)
10. Travel expenses of salesmen
 Selling (S)
Problem # 3
a.
Product Cost (Php) Period Cost (Php)
Cost Direct Direct Manufacturing Selling Administrative
materials Labor Overhead Expense Expense
Direct 220,000
materials
Factory rent 50,000
Direct labor 180,000
Factory 8,500
Utilities
Supervisor’s 60,000
salary
Depreciation 20,000
of Factory
Equipment
Sales 57,000
Commission
Advertising 47,000
Depreciation 10,000
of Office
Equipment
Salary of the 250,000
President
TOTAL 220,000 180,000 138,500 104,000 260,000

b. Total Product Cost

Total Product Cost = Direct Materials + Direct Labor + Manufacturing Overhead
Total Product Cost = Php 220,000 + Php 180,000 + Php 138,500
Total Product Cost = Php 538,500
c. Total Period Cost
Total Period Cost = Selling Expenses + Administrative Expenses
Total Period Cost = Php 104,000 + Php 260,000
Total Period Cost = Php 364,000

d. Cost per unit if the company was able to manufacture 40,000

Cost per unit = (Total Product Cost + Total Period Cost)/no of units
Cost per unit = (Php 538,500 + Php 364,000)/40,000 units
Cost per unit = Php 22.5625/unit

Problem # 6 10. Salary of employee who cuts the

Classify each of the following wood - DL
manufacturing costs incurred by the 11. Insurance – factory - OH
Marvin Desk Manufacturing Company as 12. Telephone bill in the factory - OH
follows: 13. SSS premiums of factory workers
A. Direct Material (DM) (employer’s share) - OH
B. Direct Labor (DL) 14. Overtime premium of factory workers
C. Manufacturing Overhead (OH) - OH
15. Paint - DM
1. Wood - DM
2. Sandpaper - OH Problem # 7
3. Salary of factory supervisor - OH The financial statements of Mother
4. Repairs and maintenance salaries - Goose Company included these items:
OH Marketing costs Php 160,000
5. Salary of employee who paints desk - Direct Labor Cost Php 245,000
DL Administrative Php 145,000
6. Heat, Light, and Power - OH Costs
7. Depreciation – factory building - OH Direct Materials Php 285,000
8. Depreciation – machinery - OH used
9. Salary of factory janitor - OH Fixed factory Php 175,000
overhead costs
Variable factory Php 155,000 D. Total Period Cost
overhead costs  Total Period Cost = Selling
Expense + Administrative
Compute: Expense
A. Prime Cost  Total Period Cost = Php
 Prime Cost = Direct Materials 160,000 + Php 145,000
+ Direct Labor  Total Period Cost = Php
 Prime Cost = Php 285,000 + 305,000
Php 245,000
 Prime Cost = Php 530,000 Problem # 8
Blanche Corporation estimated its unit
B. Conversion Cost costs of producing and selling 12,000
 Conversion Cost = Direct units per month as follows:
Labor + Manufacturing Direct materials Php 32
Overhead used
 Conversion Cost = Php Direct labor Php 20
245,000 + Php 155,000 + Php Variable Php 15
175,000 manufacturing
 Conversion Cost = Php overhead
575,000 Fixed Php 6
manufacturing
C. Total Inventoriable or Product overhead
Cost Variable Php 3
 Product Cost = Direct marketing costs
materials + Direct Labor + Fixed marketing Php 4
Manufacturing Overhead costs
 Product Cost = Php 285,000 + Estimated unit Php 80
Php 245,000 + Php 155,000 + cost
Php 175,000
 Product Cost = Php 860,000 Compute:
A. Total variable costs per month
  Total variable costs per month  Manufacturing cost per unit =
= Variable cost per unit Direct materials + Direct labor
produced * no of unit + Variable manufacturing
produced overhead + Fixed
 Total variable costs per month manufacturing overhead
= Php 70 * 12,000 units  Manufacturing cost per unit =
 Total variable costs per month Php 32 + Php 20 + Php 15 +
= Php 840, 000 Php 6
 Manufacturing cost per unit =
B. Variable cost per unit produced Php 73
 Variable cost per unit
produced = Direct materials
used + Direct labor + Variable
manufacturing overhead +
Variable marketing
 Variable cost per unit
produced = Php 32 + Php 20 +
Php 15 + Php 3
 Variable cost per unit
produced = Php 70

C. Total manufacturing cost

 Total manufacturing cost =
Manufacturing cost per unit *
number of units
 Total manufacturing cost =
Php 73 * 12,000 units
 Total manufacturing cost =
Php 876,000

D. Manufacturing cost per unit