COST ACCOUNTING 2016
Chapter 2 - Costs Concepts and classification
Problem 1- Ram Corporation
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Direct materials
Manufacturing overhead
Direct materials
Direct labor
Manufacturing overhead
Manufacturing overhead
Direct materials
Manufacturing overhead
Manufacturing overhead
Manufacturing overhead
Problem 2
1.
2.
3.
4.
5.
Manufacturing 6. Manufacturing
Selling
7. Manufacturing
Manufacturing 8. Selling
Manufacturing 9. Selling
Administrative10.Selling
Problem 3-Rocco
Period Cost
Product Cost
Direct mat.
Selling
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Direct labor
Mfg. OH
Adm
DM
Factory rent
Direct labor
Factory utilities
Supervision
Depreciation-FE
Sales Commission
Advertising
Depreciation-OE
Salary - pres.
220,000
50,000
180,000
8,500
60,000
20,000
1. TOTAL PRODUCT CST = 220,000 + 180,000 + 138,500 = 538,500
2. TOTAL PERIOD COST = 104,000 + 260,000 = 364,000
3. COST PER UNIT
= 538,500/ 40,000 units
57,000
47,000
10,000
250,000
= P 13.4625
Problem 4 Bug Company
1. Variable
Inventoriable
2. Variable
Inventoriable
3. Fixed
Inventoriable
4. Variable
Inventoriable
5. Variable
Inventoriable
Inventoriable
6. Variable
Period
7. Variable
Inventoriable
8. Variable
Period
9. Fixed
Period
10. Variable
Problem 5 Mighty Muffler, Inc.
a. P 50,000
b. P 50,000
c. P 60,000
500
d.
= P120/muffler x 400 = P 48,000
P 120 x 800 = P 96,000
e.
P 50,000 + P 48,000 = P 98,000
f.
P 50,000 + P 96,000 = P 146,000
g.
P 50,000/ 400
h.
P 50,000/500 = P 100
I,
P 50,000/800 = P
= P 125
62.50
j.
P 48,000/400 = P 120
k.
P 60,000/500 = P 120
l.
P 96,000/800 = P 120
m. P 125 + P 120
= P 245
n.
P 100 + P 120
= P 220
o.
= P 182.50
62.50 + P 120
Problem 6 Marvin Desk
1.
2.
3.
4.
5.
6.
DM
OH
OH
OH
DL
OH
8.
9.
10.
11.
12.
13,
OH
OH
DL
OH
OH
OH
7. OH
14. OH
15. DM
Problem 7 Mother Goose Company
1. Prime costs
530,000
2. Conversion cost
575,000
3 Inventoriable cost
860,000
4. Total period costs
305,000
Problem 8 - Blanche Corporation
`
1. Direct materials used
Direct labor
Variable manufacturing overhead
Variable marketing
Total variable cost per unit
X No. of units produced and sold
Total variable costs per month
2. DM
DL
20.00
V manufacturing
Variable cost per unit produced
3. Total variable mfg. cost ( 67 x12,000)
Total fixed mfg,cost (6 x 12,000)
Total manufacturing cost
4. Mfg. cost/unit (876,000/12,000)
P 32.00
20.00
15.00
3.00
70.00
12,000
P 840,000
32.00
15.00
P
804,000
72,000
876.000
73.00
Problem 9
1. Direct materials
P 60.00
Direct labor
30.00
Variable manufacturing overhead
9.00
Total variable manufacturing cost per unit
P 99.00
`
2. Total variable manufacturing cost per unit
Variable marketing and administrative
67.00
P 99.00
6.00
Total variable costs per unit
105.00
3.
Total variable manufacturing cost per unit
Fixed manufacturing overhead (30,000/1,200)
Full manufacturing cost per unit
P 99,00
25.00
124.00
4.
Full manufacturing cost per unit
Variable marketing and administrative
Fixed marketing and administrative
Full cost to make and sell per unit
124.00
6.00
20.00
150.00
Problem 10 Westinghouse Company
1. Variable cost/machine hour = 60,000 39,000
=
6,000 -
3,000
21,000
3,000
=
High
P60,000
2. Total monthly cost
Less Variable
6,000 x 7
3,000 x 7
7.00/machine hr.
Low
P 39,000
42,000
21,000
Fixed cost
P 18,000
P 18,000
3. Total electricity cost = Fixed cost + Variable (capacity)
=
=
18,000 + 7(4,800)
51,600
Problem 11 Johnson Corporation
1. Variable cost per machine hour =
35,600 20,000
4,000 - 2,000
= 7.80 per machine hour
2.
4,000 hours
2000 hours
Total electricity expense
35,600
20,000
Less: Variable costs
( 4,000 x 7.80)
31,200
( 2000 x 7.80)
______
15,600
Fixed cost
4,400
4,400
3.
Fixed cost
Variable cost ( 4,500 x 7.50)
Totl manufacturing costs
4,400
35,100
39,500
Problem 13 Marco Company
1. Direct materials
Direct labor
Factory supplies
24,000
Direct variable costs
1,324,000
Department A Department B
P 400,000
P
700,000
350,000
600,000
10,000
P
760,000
2. Controllable direct fixed costs
Supervisory salaries
45,000
55,000
3. Uncontrollable direct fixed costs:
Depreciation machinery and
Equipment
100,000
180,000
55,000
180,000
235,000
4. Controllable direct fixed cost
Uncontrollable direct fixed cost
Total direct fixed cost
45,000
100,000
145,000
5. Total direct variable cost
760,000
Total direct fixed
235,000
Total direct cost
1,559,000
6. Allocated costs from headquarters
Allocated repairs & maintenance
Allocated factory rent bldg.
Allocated plant executives salaries
Total indirect costs
7. Allocated costs from headquarters
Allocated factory rent bldg.
Allocated plant executives salaries
Depreciation- mach. & equipment
Total unavoidable costs
True/False Questions
1. False
6. True
P 1,324,000
145,000
905,000
120,000
40,000
60,000
140,000
360,000
120,000
60,000
140,000
100,000
420,000
11. False
180,000
80,000
140,000
210,000
610,000
180,000
140,000
210,000
180,000
710,000
16. True
2.
3.
4.
5.
False
True
False
False
7. False
8. True
9. False
10. True
12. False
13. True
14. False
15. False
Multiple choice
1. D
2. C
3. B
4. C
5. D
6. A
7. D
8. D
9. B
10. C
Multiple choice
1.
2.
3.
4.
5.
A
C
A
B
A
11.
12.
13.
14.
C
D
C
B
15. A
16. B
17. B
18. A
19. D
20. B
- Problems
6.
7.
8.
9.
10.
B
C
B
B
A
11.
12.
B
A
17. False
18. True
19. False
20. True
