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Activity No. 1 - Cost, Concepts and Classifications

Problem I: This problem classifies 9 costs incurred by J. Hendrix Corporation into direct materials, direct labor, and manufacturing overhead categories. Problem II: This problem classifies 10 costs as either manufacturing (M), selling (S), or administrative (A). Problem III: This problem computes direct materials, direct labor, manufacturing overhead, selling expense, administrative expenses, total product cost, total period cost, and cost per unit for a company that manufactured 40,000 units. Problem IV: This problem classifies costs as either variable or fixed and as either inventoriable or period costs. Problem V: This problem provides partial

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596 views4 pages

Activity No. 1 - Cost, Concepts and Classifications

Problem I: This problem classifies 9 costs incurred by J. Hendrix Corporation into direct materials, direct labor, and manufacturing overhead categories. Problem II: This problem classifies 10 costs as either manufacturing (M), selling (S), or administrative (A). Problem III: This problem computes direct materials, direct labor, manufacturing overhead, selling expense, administrative expenses, total product cost, total period cost, and cost per unit for a company that manufactured 40,000 units. Problem IV: This problem classifies costs as either variable or fixed and as either inventoriable or period costs. Problem V: This problem provides partial

Uploaded by

Dan Ryan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Pamantasan ng Cabuyao

Brgy. Banay- Banay, City of Cabuyao, Laguna


Managerial Accounting
Costs, Concepts and Classification

ACTIVITY 1

Name: Score:
Course and Section: Date:

Problem I

Presented below is a list of costs and expenses usually incurred by J. Hendrix Corporation, a
manufacturer of furniture, in its factory:

1. Metal used in manufacturing tables


2. Insurance on factory machines
3. Leather used in manufacturing furniture
4. Wages paid to machine operators
5. Depreciation of factory machinery
6. Salaries of factory supervisors
7. Wood used in manufacturing furniture
8. Sandpaper, bolts and nails
9. Property taxes on factory building

Instructions:

Classify the above items into the following categories (a) Direct Materials, (b) Direct Labor and (c)
Manufacturing Overhead.

Problem II

Classify the following as either manufacturing (M), selling (S), or administrative (A)

1. Metal for the furniture of golf clubs


2. Wages of drivers delivering goods to customers
3. Rent on factory building
4. Freight- in of materials purchased
5. President’s salary
6. Cost of machine breakdown
7. Power to operate factory equipment
8. Advertising
9. Commission paid to sales personnel
10. Travel expenses of salesmen

Problem III

RATM Delivery Services reports the following costs and expenses in June of the current year:

Direct materials
Factory rent
Direct labor
Factory utilities
Supervisor’s salary in the factory
Depreciation—factory equipment
Sales commission
Advertising
Depreciation—office equipment
Salary of the president

Required:

Compute the following:

a. (1) Direct Materials, (2) Direct Labor, (3) Manufacturing Overhead, (4) Selling Expense and (5)
Administrative Expenses
b. Total Product Cost
c. Total Period Cost
d. Cost per unit if the company was able to manufacture 40,000 units

Problem IV

Classify each of the following costs of Queen Company in two ways: (a) as Variable (V) or Fixed costs
(F): (b) as Inventoriable Costs (I) or Period Costs (P)

(a) V or F (b) I or P

Example: Direct Labor V I

1. Wood used in bookcases


2. Machine depreciation based on machine hours
3. Fire Insurance on factory equipment
4. Wiring used in radios
5. Sales Commissions

Problem V

L. Zepp, Inc. operates an automobile service facility, which specializes in replacing mufflers on cars. The
following table shows the costs incurred during a month when 750 mufflers were replaced.

Number of Muffler Replacements

400 500 800


Total Costs
Fixed Costs a P 50,000 b
Variable Costs c 60,000 d
Total Costs e P110,000 f
Cost per muffler replacement
Fixed Costs g h i
Variable Costs j k l
Total Costs per replacement m n o

Required: Fill the missing amounts.

Problem VI

The financial statements of Talica Company included these items:

Marketing Costs P 160,000


Direct Labor Cost 245,000
Administrative Costs 145,000
Direct Materials Used 285,000
Fixed Factory Overhead Costs 175,000
Variable Factory Overhead Costs 155,000

Compute:

1. Prime Cost
2. Conversion Cost
3. Total Inventoriable Cost/ Product Cost
4. Total Period Cost
Problem VII

M24 Corporation estimated its unit costs of producing and selling 12,000 units per month as follows:

Direct Materials used P 32.00


Direct Labor 20.00
Variable Manufacturing Overhead 15.00
Fixed Manufacturing Overhead 6.00
Variable Marketing Costs 3.00
Fixed Marketing Costs 4.00
Estimated Unit Cost P 80.00

Compute:

1. Total Variable Costs per month.


2. Variable Cost per Unit produced.
3. Total Manufacturing Cost.
4. Manufacturing Cost per Unit.

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