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Problem
1. Write A if the cost is classified as a period cost while B if the cost is a product cost.
The following selected information was extracted from the 2021 accounting records of ABC Company:
Raw materials Purchased* PHP2,840,000 Building Depreciation** PHP3,300,000
Direct labor 1,780,000 Advertising expense 800,000
Indirect labor 350,000 Factory supervisor salary 1,200,000
Sales commissions 1,500,000 Building maintenance 4,000,000
Executive officers’ 1,000,000 Building manager’s salary 1,000,000
salaries
Real property taxes*** 500,000 Building utilities 800,000
**Seventy percent of the company’s building was devoted to production activities; the remaining 30% was
used for selling and administrative functions. ABC’s beginning and ending work-in-process inventories
amounted to PHP3,060,000 and PHP2,450,000, respectively. Raw materials beginning and ending balances
amounted to PHP1,200,000 and PHP1,800,000, respectively. The requisition slip for raw materials reveals
that PHP40,000 worth of indirect materials were requested during the period.
2. Factory Overhead:
1
Name: ________________________ ID: A
5. Write A if the cost is classified as a direct cost while B if the cost is an indirect cost.
Some selected sales and cost data for Job Order 100 are given below:
6. Prime Cost
7. Conversion Cost
8. Direct Cost
9. Indirect Cost
2
Name: ________________________ ID: A
14. Write A of the cost is classified as a variable cost while B if the cost is fixed cost.
ABC Corporation a distributor of product A, its company’s revenues and expenses for the last three months
are given below:
Required:
15. Identify each of the company’s expenses as either variable, fixed, or mixed costs.
3
Name: ________________________ ID: A
The following information are available for ABC Corporation for the current period:
Required:
19. Using the high-low method, compute the fixed cost per program.
20. Using the least-square regression method, compute the variable cost per unit.
21. Using the functions derived from the two item, predict the cost to be incurred for 200 units of output.
The method of least squares was used to develop a cost equation to predict cost and the monthly data for the
past 12 months were used for the analysis.
Intercept- PHP10,000
Slope- 5
Coefficient of correlation - 0.94
23. Using the cost formula, predict the cost for 800 labor hours.
24. What percentage of the variability in the cost is explained by the number of direct labor hours? Do you think
the equation will predict well?
4
ID: A
PROBLEM
1. ANS:
TBD
1
ID: A
11. ANS:
TBD
2
ID: A
22. ANS:
TBD