Cost Accounting

Chapter 2 - Costs Concepts and classification

Problem 1 Problem 2
1. Direct 6. Direct 1. Manufacturing 6. Manufacturing
2. Indirect . Direct 2. !elling . Administrati"e
#. Direct $. Indirect #. Manufacturing $. !elling
%. Direct &. Direct %. !elling &. Administrati"e
'. Direct 1(.Direct '. Administrati"e 1(.!elling
Problem #
1. )ariable Product Direct
2. )ariable Product Direct
#. *i+ed Product Indirect
%. )ariable Product Direct
'. *i+ed Product Indirect
6. *i+ed Period Indirect
. *i+ed Period Indirect
$. )ariable Period Direct
&. *i+ed Product Indirect
1(.*i+ed Period Indirect
Problem % ,ug Compan-
1. *i+ed Period 6. )ariable Period
2. *i+ed In"entoriable . )ariable In"entoriable
#. )ariable In"entoriable $. *i+ed In"entoriable
%. )ariable In"entoriable &. *i+ed Period
'. *i+ed In"entoriable 1(. *i+ed In"entoriable
Problem ' .ounin Manufacturing Compan-
1. Direct materials '(/(((
Direct labor 6(/(((
Prime cost 11(/(((
2. Direct labor 6(/(((
*0 11(/((( 2 &/((( 22'(((3 %%/(((
Con"ersion costs 1(%/(((
#. Direct materials '(/(((
Direct labor 6(/(((
*actor- o"erhead %%/(((
Product costs 1'%/(((
Problem 6 Mother 4oose Compan-
1. Prime costs - %#(/(((
2. Con"ersion cost - '2'/(((
# In"entoriable cost - 1(/(((
%. 5otal period costs - #('/(((
Problem ,lanche Corporation
6 1. Direct materials used P #(.((
Direct labor 2(.((
)ariable manufacturing o"erhead 1'.((
)ariable mar7eting #.((
5otal "ariable cost per unit 6$.((
8 9o. of units produced and sold 2(/(((
5otal "ariable costs per month P 1/#6(/(((
2. *i+ed manufacturing o"erhead P 1(.((
*i+ed mar7eting costs %.((
5otal fi+ed cost per unit 1%.((
8 9o. of units produced and sold 2(/(((
5otal fi+ed costs per month P 2$(/(((
Page 2 Chapter 2
Prblem $
1. Direct materials P 6(.((
Direct labor #(.((
)ariable manufacturing o"erhead &.((
5otal "ariable manufacturing cost per unit P &&.((
6 2. 5otal "ariable manufacturing cost per unit P &&.((
)ariable mar7eting and administrati"e 6.((
5otal "ariable costs per unit 1('.((
#. 5otal "ariable manufacturing cost per unit P &&/((
*i+ed manufacturing o"erhead 1#(/(((:1/2((3 2'.((
*ull manufacturing cost per unit 12%.((
%. *ull manufacturing cost per unit 12%.((
)ariable mar7eting and administrati"e 6.((
*i+ed mar7eting and administrati"e 2(.((
*ull cost to ma7e and sell per unit 1'(.((
Problem & - Chi; Manufacturing Compan-
1. Materials put into production P &(/(((
Direct labor &'/(((
Prime costs P 1$'/(((
2. Direct labor &'.(((
*actor- o"erhead
Indirect materials 6(/(((
Indirect labor 2'/(((
0ther o"erhead cost 6(/((( 1%'/(((
5otal con"ersion costs 2%(/(((
#. Direct materials &(/(((
Direct labor &'/(((
*actor- o"erhead 1%'/(((
5otal product costs ##(/(((
%. none
Problem 1( <ohnson Corporation
1. )ariable cost per machine hour = #'/6(( 2(/(((
%/((( - 2/(((
= .'( per machine hour
2. %/((( hours 2((( hours
5otal electricit- e+pense #'/((( 2(/(((
>ess? )ariable costs
1 %/((( + .'(3 #(/(((
1 2((( + .'(3 @@@@@@ 1'/(((
*i+ed cost '/((( '/(((
#. *i+ed cost '/(((
)ariable cost 1 6/((( + .'(3 %'/(((
5otl manufacturing costs '(/(((
Problem 11 )alde; Motors Co.
1. )ariable cost per machine hour = '/%' #/&'
21( - 1%'
= 2#.($ per machine hour
2. 21( hours 1%' hours
5otal o"erhead costs '/%' #/&'
>ess? )ariable costs
1 21( + 2#.($3 %/$%
1 1%' + 2#.($3 @@@@@ #/#%
*i+ed cost 62$ 62$

Page #
Problem 12 <ustine Compan-
1 )ariable cost per hour = %/%( 2/$2(
'2( - #((
= .'( per hour
2. '2( hours #(( hours
5otal %/%( 2/$2(
>ess? )ariable cost
'2( + .'( #/&((
#(( + .'( @@@@@ 2/2'(
*i+ed cost '( '(
#. 5otal cost = P '( 2 P/'( 8
%. *i+ed cost P '(
)ariable 1 %2( hrs. + P .'(3 #/1'(
5otal maintenance cost P #/2(
5rue:*alse Auestions
1. *alse 6. 5rue 11. *alse 16. 5rue
2. *alse . *alse 12. *alse 1. *alse
#. 5rue $. 5rue 1#. 5rue 1$. 5rue
%. *alse &. *alse 1%. *alse 1&. *alse
'. *alse 1(. 5rue 1'. *alse 2(. 5rue
Multiple choice 5heor-
1. , 6. A 11. C 16. ,
2. C . D 12. A 1. ,
#. , $. D 1#. C 1$. A
%. C &. , 1%. , 1&. D
'. D 1(. C 1'. , 2(. ,
Multiple choice Problems
1. A 6. A 11. A 16. A
2. , . C 12. , 1. ,
#. C $. C 1#. , 1$. D
%. C &. A 1%. C 1&. A
'. , 1(. C 1'. , 2(. A