TUGAS ASSIGNMENT

COST ACCOUNTING LB90

FRANS SUGATA HERMANTO

ACCOUNTING / 2401955031

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Chapter 2

Introduction Cost terms and Purposes

1. Define cost object and give three examples!

Cost accounting is a process in which there is a recording, tracking, and analyzing
costs associated with company activities.
Examples in Starbucks
- Product : Fresh-brewed coffee, hot and iced espresso beverages, Iced Coffee.
- Project : Starbucks Planet free of pollution and sustainable in business
- Customer : Communities
2. What is the main difference between direct costs and indirect costs?
Direct cost is a cost that can be charged directly to the cost object or product. Usually,
this cost is to pay employees who produce a product, and includes the raw materials
needed to produce certain goods, while the Indirect cost is a cost that cannot be linked
and charged directly with the units produced. Generally, indirect costs include
electricity and utilities, distribution and sales, building maintenance, and other office-
related costs.

3. Axle and Wheel Manufacturing currently produces 1,000 axles per month. The
following per unit data apply for sales to regular customers:

Direct materials $200

Direct manufacturing labour 30
Variable manufacturing overhead 60
Fixed manufacturing overhead 40
Total manufacturing costs $330

The plant has capacity for 2,000 axles.

Required:

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 a. What is the total cost of producing 1,000 axles?

Total cost
= ((Direct materials + Direct manufacturing labour + Variable manufacturing overhead) *
1000 units) + (Fixed manufacturing overhead * 1000 units per month)
= (($200 + $30 + $60) x 1,000 units) + ($40 x 1,000 units per month)
= $330,000
b. What is the total cost of producing 1,500 axles?
Total cost
= ((Direct materials + Direct manufacturing labour + Variable manufacturing overhead) *
1500 units) + (Fixed manufacturing overhead * 1000 units per month)
= (($200 + $30 + $60) x 1,500 units) + ($40 x 1,000 units per month)
= $475,000
c. What is the per unit cost when producing 1,500 axles?
Cost per unit
=Total cost / unit produced
= $475,000 / 1,500 = $316.66 per unit
4. Angel Inc., had the following activities during 20X5:

Direct materials:

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 Beginning inventory $ 40,000
Purchases 123,200
Ending inventory 20,800
Direct manufacturing labour 32,000
Manufacturing overhead 24,000
Beginning work-in-process inventory 1,600
Ending work-in-process inventory 8,000

Required:
a. What is the cost of direct materials used during 2020?
b. What is cost of goods manufactured for 2020?
c. What amount of prime costs was added to production during 2020?
d. What amount of conversion costs was added to production during 2020?
Answer
a. = Beginning inventory + Purchases – Ending Inventory
= $40,000 + $123,200 - $20,800
= $142,400
b. = Cost of direct materials used + Direct manufacturing labour + Manufacturing
overhead + Beginning work-in-process inventory - Ending work-in-process inventory
= $142,400 + $32,000 + $24,000 + $1,600 - $8,000
= $192,000
c. = Cost of direct materials used + Direct manufacturing labour

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 = $142,400 + $32,000
= $174,400
d. = Direct manufacturing labour +Manufacturing overhead
= $32,000 + $24,000
= $56,000

5. Tools Manufacturing Company had the following account balances for the quarter
ending March 31, unless otherwise noted:

Work-in-process inventory (January 1) $ 140,400

Work-in-process inventory (March 31) 171,000

Direct materials used 378,000

Indirect materials used 84,000
Direct manufacturing labour 480,000
Indirect manufacturing labour 186,000

Property taxes on manufacturing plant building 28,800

Salespersons' company vehicle costs 12,000
Depreciation of manufacturing equipment 264,000
Depreciation of office equipment 123,600

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 Miscellaneous plant overhead 135,000
Plant utilities 92,400
General office expenses 305,400
Marketing distribution costs 30,000

Required:

Prepare a cost of goods manufactured schedule for the quarter.

Messinger Manufacturing Company
Cost of Goods Manufactured and Sold
For Quarter
Direct raw materials used 378,000
Direct labor 480,000

Overhead
Indirect Material 84,000
Indirect Labor 186,000
Property taxes on Plant Building 28,800
Depreciation of manufacturing equipment 264,000
Miscellaneous plant overhead 135,000
Plant Utilities 92,400 790,200
Total manufacturing costs 1,648,200