Tutorial 1.

Lecture 1
Chapter 2

2- 16.
Supreme
Deluxe
Regular i
Manuf. costs:

$84 54
$ $62 200
Direct materid costs DM
(LB 14 $28 $8 50
Direct manuf. labor costs

Manuf overhead costs of $4

140 $84/$2454150
166

Units duced 80 120 lo

pro
1. Manuf, cost per
unit for each productproduced in Lulz

Mannf. cost
per unit-troduced
Supreme: (84 1 +42):80
+
=
$1,75 per
unit

Deluxe:(54 +28+84):120 $1,58 unit

per
=

Regular:(82+ 8 +

(4):100 $0,94 per = unit.

Fixed costs allocation: direct

28+8=0.4 per mannf. Labor
supreme delixe regular
allocated 0.4x1h 5,6 94x28=11,2 0.4.8: 3,220
fixed costs
=

variable
corts 140 -

5,62 166 11,2=-

94-3,2= 310
=134,4 154, 8
=
90,8
=

UP IP 120 100 100

cost per unit $1,75 $1,38 $0,94
variable 134, 4:10 = 154,81120 =

go, 8:1002
costmit $1,68
=
$1,29
=

$0,91
=
 2.
Ang'zz supreme deluxe regular
units produced 120 160 180

Why the
might July'z2 info many, on cost per unit be

mishading when predicting total many costs in Aug'zz?

because of fixed cost. In the
part of the exercise the fixed
costs of costs
20 million are included in the unit costs.
with the output,
fixed
the will not increase
proportionally
called fixed costs.
that's
why they're
TMC
total mano.
VMC
variable many.
costs. costs

supreme 120.$1,75210 =
120.$1,68 201,6
=

deluxe 160.$1,38=220,8 100.$ 1,29 = 206,4

$0,94 169,2 180.$0,91 163,8

regular 180 ·

-
=

-
=

$600 +FC(20)7$591,8
2- 17

1.
Why might MOP's
managers prefer energy
costs

to be a direct cost rather than a

manufacturing
overhead cost? task
from
Total Manf. Costs TMC

I
16
↓
2-

Supreme 84+14+ 39,8 16,8 154,6

+ =
< 140

Deluxe 5 +28 40,7 33,6 156,3<

+
+
=

166

Regular 62 +8 9,5 9,6

+
+
89,1
=

<94
and will be relieved of
Managers of Deluxe Regular
costs
costs. In general one can
say
more
it can be

assigned as direct costs this is more in accordance

the
with of costs (more fair)
 Compute the
2.
manufacturing cost per unit
for each product line after the cost Shore.
analysis has been
performed by Judy

-- -

,6
154,6 156,389,1

Supreme: 154,6:10 $1,93

B
unit 3 1,75
per
=

Dehixe: 156,3:190 $1,30 per unit =

1,38

Regular: $0,89
89,1:100 per
unit 3$0,94
=

Conclusion:Before Shore's the Deluxe and

analysis,
Regular product lines were being overcosted and
the line undercosted.
supreme was

3. The cost unit for Deluxe and

Regular
per
lines are lower than in 216 because less

costs are
assigned. the cost of
supreme are
higher than before because more costs are

assigned. Given that the allocation is based

to the costs.
according cause of
 2 22-

1. the UC ton
of beach sand mined:
per
subcontractor $20 per ton

7 $130
a ->
Ve
:

tax:$50
6 ->
government per
ton

the FC
per
mouth:
2 -> 0-100 tons
per day
-> $150000
$300000
I Is
101-200" =>

201-300" -"->$450000
2.
Concept ofrelevantrange is
poten tially
relevant
for both graphs. However, the question
doesn't place restrictions on the unit variable costs.

the
range for fixed
relevant total costs from
is

E
0-100,
101-200,
within these the total FCs
201
ranges,
-

300
/ ---

don't change
Total Variable Costs
in total.
Total,IC
A

$650,000 -

5)450000

300000
$ ~relevant
range
$325,000
-

150000
$
tonsmined Tope
arbor 50000 100
360 sb
3. What is the cost per ton of sandmined?
unit
Yous mined Fixed unit Variable Total unit
unit
Yonsmined per costper tou per ton
cost

day per month costper ton

(e) (2) 25.(1) (3)

=
7
=

(a) (s 4)
+

as 180 4500
0000=$86,67
4500
$130 $196,67

10000$81,82
6 220 5500
5500
=

$1305911,82
upupoer
the difference is caused
by the fixed cost increment

from 101-200 tons

being spread over an increment

of 80 tons, while 2 increment from 201-300

is
spread over an increment of 20 tons. Even
higher
if: a) 200 tons (1905) and 6)708 (219,555)
are mined.
2-34. 27. Oh. 23

Inventoriable cost:are all costs of product

a that are
incurred
regarded
and then
as an

become
asset
cost
when
of
they sold when
good
are

the product is sold.

work-in process inventory -
->
finished goods inventory 2025
-

Period costs:are all the costs in the income statement other

recorded
Helen
off
they
grade and
Deigade
serie
a which

eatportion
Direct material costs:
millions)
Montered,ene

purchased
Beginning inventory, Jan 1, 2022
t
materials
i
Cost ofdirect material available for use $40
$5
Ending inventory,Dec 31, 2022

Direct Material used Dos

S

I
labour Costs ↳
Direct
Manufacturing
IndirectManufacturing costs:Manf. Oh costs:
Plantsupplies Used $6
Property Taxes on
plant $I
Plant Utilities $5
Indirect labour costs
Manufacturing
Depreciation,plantand equimpent ag,
less
orhed

Munseal
far l g amete re d
m anufa ct u r i g e, e
-facturing
costs accountfor Dec31,2022 $206 to

Ending
-

work in
inventory
process $2
Costs of goods manufactured Soh
Chan Corporation

for the Ended Dec. 31, 2022

year
/in millions)

Revenues $350
costof goods sold: 906S
I

Beginning finished goods, Jans, 2022, $40 beginning inventory

I
cost of goods manufactured Ston purchases
cost of goods available for sale $244
finished inventory
Besend
Ending inventory of goods 112
$118
Gross margin -

Marke tiny, distribution and $90

customa costs -

Operating income $ Es
OF 2065-Gross costs
Margin-Variable Opertly
=