QUEZON CITY UNIVERSITY

San Bartolome, Novaliches, Quezon City

ACCOUNTING 3
Pricing and Costing

ASSIGNMENT NO.1 4 problems

Problem: 1 4 POINTS
The financial statements of Mother Goose Company included these items:
Marketing costs 160,000.00
Direct labor cost 245,000.00
Administrative costs 145,000.00
Direct materials used 285,000.00
Fixed factory overhead costs 175,000.00
Variable factory overhead cost 155,000.00
Requirement:
Compute:
1. Prime cost
Solution:
(PRIME COST= DM+DL) 285,000.00 + 245,000.00=530,000.00

2. Conversion cost
(CONVERSION= DL+FOH) 245,000.00+330,000.00= 575,000.00

3. Total invetoriable /product cost

(Product cost = DM+DL+FOH) 285,000.00+245,000.00+330,000.00=860,000.00

4. Total period cost

(MC+AC) 160,000.00+145,000.00=305,000.00
Problem: 2 4 POINTS
Blance Corporation estimated its unit costs of producing and selling 12,000
units per month as follows:
Direct materials used 32
Direct labor cost 20
Variable manufacturing overhead cost 15
Fixed manufacturing overhead cost 6
Variable marketing cost 3
Fixed marketing cost 4
Estimiated unit cost 80
Requirement:
Compute:
1. Total variable costs per month
12,000X80=960,000
2. Variable cost per unit produced
960,000/12,000=80
3. Total manufacturing cost
12,000X73=876,000
4. Manufacturing cost per unit
(DM+DL+VOH+FOH)=73
Problem: 3 4 POINTS
CAR Corporation has the following facts, complete the requirements below: Sales
price 200.00 per unit
Fixed cost:
Marketing and Administrative 24,000 per period
Manufacturing overhead 30,000 per period
Variable cost:
Marketing and Administrative 6 per unit
Marketing overhead 9 per unit
Direct materials used 30 per unit
Direct labor cost 60 per unit
Units produced and sold 1,200 per period
 Requirement:
Compute:
1. Variable manufacturing cost per unit
1,200/99=12.12
2. Variable cost per unit
1,200/105=11.43
3. Full manufacturing cost per unit
54,105/1,200=45.08
4. Full cost to make and sell per unit
Problem: 4 3 POINTS
Westinghouse Company manufactures major appliances. Because of growing
interest it its product it has just had its most successful year. In preparing the
budget for next year, its controller compiled these data:
MONTH VOL. IN MACH. HRS ELECTRICITY COST
July 6,000 60,000
Augsut 5,000 53,000
Sptember 4,500 49,500
october 4,000 46,000
November 3,500 42,500
December 3,000 39,000
6-MONTH TOTAL 26,000 290,000
Using the high-low method, compute:
1. The variable cost per machine hour

HIGH LOW
COST 60,000 39,000 =21,000
HR 6,000 3,000 = 3,000
--------------
7HR

2. The monthly fixed electricity costs

HIGH LOW
ELEC. COST 60,000 39,000
42,000 (7HRX600) 21,000 (7X3000)
+ -----------------------------------------------------------------------
18,000 18,000

3. The total electricity costs if 4,800 machine hours are projected to be

used next month.

4,000X7HR=33,600

TOTAL POINT 15 POINTS