Cost Accounting

Chapter 2 - Costs Concepts and classification

Problem 1
1. Direct
2. Indirect
3. Direct
4. Direct
5. Direct

6. Direct
7. Direct
8. Indirect
9. Direct
10.Direct

Problem 2
1. Manufacturing
2. Selling
3. Manufacturing
4. Selling
5. Administrative

Problem 3
1. Variable
2. Variable
3. Fixed
4. Variable
5. Fixed
6. Fixed
7. Fixed
8. Variable
9. Fixed
10.Fixed

Product
Product
Product
Product
Product
Period
Period
Period
Product
Period

Direct
Direct
Indirect
Direct
Indirect
Indirect
Indirect
Direct
Indirect
Indirect

Problem 4 Bug Company

1. Fixed
Period
2. Fixed
Inventoriable
3. Variable
Inventoriable
4. Variable
Inventoriable
5. Fixed
Inventoriable

6. Variable
7. Variable
8. Fixed
9. Fixed
10. Fixed

6. Manufacturing
7. Administrative
8. Selling
9. Administrative
10.Selling

Period
Inventoriable
Inventoriable
Period
Inventoriable

Problem 5 Rounin Manufacturing Company

1.
Direct materials
Direct labor
Prime cost

50,000
60,000
110,000

2.

Direct labor
FO (10,000 + 9,000 +25000)
Conversion costs

60,000
44,000
104,000

3.

Direct materials
Direct labor
Factory overhead
Product costs

50,000
60,000
44,000
154,000

Problem 6 Mother Goose Company

1. Prime costs
2. Conversion cost
3 Inventoriable cost
4. Total period costs
Problem 7 Blanche Corporation

430,000
525,000
710,000
305,000

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

P 30.00
20.00
15.00
3.00
68.00
20,000
P 1,360,000

2. Fixed manufacturing overhead

Fixed marketing costs
Total fixed cost per unit
X No. of units produced and sold
Total fixed costs per month

P 10.00
4.00
14.00
20,000
P 280,000

Page 2 Chapter 2
Prblem 8
1. Direct materials
Direct labor
Variable manufacturing overhead
Total variable manufacturing cost per unit
`

2. Total variable manufacturing cost per unit

Variable marketing and administrative
Total variable costs per unit

P 60.00
30.00
9.00
P 99.00
P 99.00
6.00
105.00

3. Total variable manufacturing cost per unitP 99,00

Fixed manufacturing overhead (30,000/1,200)
25.00
Full manufacturing cost per unit
124.00
4. Full manufacturing cost per unit
Variable marketing and administrative
Fixed marketing and administrative
Full cost to make and sell per unit
Problem 9 - Chiz Manufacturing Company
1. Materials put into production
Direct labor
Prime costs
2. Direct labor
Factory overhead
Indirect materials
Indirect labor
Other overhead cost
Total conversion costs
3. Direct materials

124.00
6.00
20.00
150.00
P 90,000
95,000
P 185,000
95.000

60,000
25,000
60,000

145,000
240,000
90,000

Direct labor
Factory overhead
Total product costs

95,000
145,000
330,000

4. none
Problem 10 Johnson Corporation
1. Variable cost per machine hour = 35,600 20,000

4,000 - 2,000
= 7.50 per machine hour
2.
Total electricity expense
Less: Variable costs
( 4,000 x 7.50)
( 2000 x 7.50)
Fixed cost
3.

4,000 hours
35,000

2000 hours
20,000

30,000
______
5,000

15,000
5,000

Fixed cost
Variable cost ( 6,000 x 7.50)
Totl manufacturing costs

5,000
45,000
50,000

Problem 11 Valdez Motors Co.

1. Variable cost per machine hour = 5,475 3,975
210 - 145
= 23.08 per machine hour
2.
Total overhead costs
Less: Variable costs
( 210 x 23.08)
( 145 x 23.08)
Fixed cost

210 hours
5,475

145 hours
3,975

4,847
_____
628

3,347
628

Page 3
Problem 12 Justine Company
1

Variable cost per hour = 4,470 2,820

520 - 300
= 7.50 per hour

2.
Total
Less: Variable cost
520 x 7.50
300 x 7.50
Fixed cost
3.

Total cost = P 570 + P7,50 X

520 hours
4,470

300 hours
2,820

3,900
_____
570

2,250
570

4.

Fixed cost
Variable ( 420 hrs. x P 7.50)
Total maintenance cost

True/False Questions
1. False
6. True
2. False
7. False
3. True
8. True
4. False
9. False
5. False
10. True

570
3,150
P 3,720

11. False
12. False
13. True
14. False
15. False

16. True
17. False
18. True
19. False
20. True

Multiple choice Theory

1. B
6. A
2. C
7. D
3. B
8. D
4. C
9. B
5. D
10. C

11. C
12. A
13. C
14. B
15. B

16. B
17. B
18. A
19. D
20. B

Multiple choice Problems

1. A
6. A
2. B
7. C
3. C
8. C
4. C
9. A
5. B
10. C

11. A
12. B
13. B
14. C
15. B

16. A
17. B
18. D
19. A
20. A