University of Belize

ACTG 3151 Cost Accounting 1

Test #1, 5:30 – 6:45 pm
20% of Final Grade

This paper consists of 3 questions. Please attempt all Questions. Total 50 Marks to be prorated to
20%. Feel free to submit your answers on the test paper.

1) (a) List the four standards of ethical conduct for management accountants. For each standard,
give an example that demonstrates compliance with that standard. (5 marks)

(b) Explain the difference between a financial accountant and a management accountant.
(5 marks)

2) (a) Arch Products Company manufactures office furniture. Recently, the company decided to
develop a formal cost accounting system and classify all costs into three categories.

Required
Categorize each of the following items as being appropriate for:
(1) cost tracing to the finished furniture,
(2) cost allocation of an indirect manufacturing cost to the finished furniture, or
(3) as a nonmanufacturing item. (10 marks)
Cost Cost Non-manufacturing
Item Tracing Allocation Cost

Carpenter wages ________ ________ ________

Depreciation - office building ________ ________ ________
Glue for assembly ________ ________ ________
Lathe department supervisor ________ ________ ________
Lathe depreciation ________ ________ ________
Lathe maintenance ________ ________ ________
Lathe operator wages ________ ________ ________
Lumber ________ ________ ________
Samples for trade shows ________ ________ ________
Metal brackets for drawers ________ ________ ________
Factory washroom supplies ________ ________ ________
b) Butler Hospital wants to estimate the cost for each patient stay. It is a general health care facility
offering only basic services and not specialized services such as organ transplants.

Required:
a. Classify each of the following costs as either direct or indirect with respect to each patient.
(5 marks)
b. Classify each of the following costs as either fixed or variable with respect to hospital costs per
day. (5 marks)

Direct Indirect Fixed Variable

Electronic monitoring ________ ________ ________ ________

Meals for patients ________ ________ ________ ________
Nurses' salaries ________ ________ ________ ________
Parking maintenance ________ ________ ________ ________
Security ________ ________ ________ ________

3) Angelle’s most recent income statement is given below.

Sales (8,000 units) $160,000

Less variable expenses (68,000)
Contribution margin 92,000
Less fixed expenses (50,000)
Net income $42,000

Required:

a. Contribution margin per unit is $ ________ per unit

b. If sales are doubled total variable costs will equal $ ________
c. If sales are doubled total fixed costs will equal $ ________
d. If 20 more units are sold, profits will increase by $ ________
e. Compute how many units must be sold to break even. # ________
f. Compute how many units must be sold to achieve
operating income of $60,000. # ________
g. Compute the revenue needed to achieve an after tax
income of $30,000 given a tax rate of 30%. $ ________

Total marks (20 marks)