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    Activity - 1 - MT

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    Kez
    The document contains 7 problems involving cost accounting concepts such as cost behavior analysis, calculation of cost of goods manufactured, cost of goods sold, high-low method, and least squares method. The problems require identifying cost items as fixed or variable, direct or indirect, manufacturing, selling or administrative costs. They also require computations of preventive costs, appraisal costs, internal failure costs, external failure costs, variable costs, total fixed costs, and cost of operations using provided data.

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    Activity - 1 - MT

    Uploaded by

    Kez
    166 views3 pages
    The document contains 7 problems involving cost accounting concepts such as cost behavior analysis, calculation of cost of goods manufactured, cost of goods sold, high-low method, and least squares method. The problems require identifying cost items as fixed or variable, direct or indirect, manufacturing, selling or administrative costs. They also require computations of preventive costs, appraisal costs, internal failure costs, external failure costs, variable costs, total fixed costs, and cost of operations using provided data.

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    Activity _ 1 - MT

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    The document contains 7 problems involving cost accounting concepts such as cost behavior analysis, calculation of cost of goods manufactured, cost of goods sold, high-low method, and least squares method. The problems require identifying cost items as fixed or variable, direct or indirect, manufacturing, selling or administrative costs. They also require computations of preventive costs, appraisal costs, internal failure costs, external failure costs, variable costs, total fixed costs, and cost of operations using provided data.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    166 views3 pages

    Activity - 1 - MT

    Uploaded by

    Kez
    The document contains 7 problems involving cost accounting concepts such as cost behavior analysis, calculation of cost of goods manufactured, cost of goods sold, high-low method, and least squares method. The problems require identifying cost items as fixed or variable, direct or indirect, manufacturing, selling or administrative costs. They also require computations of preventive costs, appraisal costs, internal failure costs, external failure costs, variable costs, total fixed costs, and cost of operations using provided data.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Problem 1

    Cost Item Product or Direct or Fixed or


    Period Indirect Variable
    1. Depreciation on salespersons' cars      
    2. Rent on equipment used in the factory      
    3. Lubricants used for machine maintenance      
    4. Salaries of personnel who work in the finished goods      
    warehouse
    5. Soap and paper towels used by factory workers at the      
    end of a shift
    6. Factory supervisors' salaries      
    7. Heat, water, and power consumed in the factory      
    8. Materials used for boxing products for shipment      
    overseas
    9. Advertising costs      
    10. Workers' compensation insurance for factory      
    employees
    11. Depreciation on chairs and tables in the factory      
    lunchroom
    12. The wages of the receptionist in the administrative      
    offices
    13. Cost of leasing the corporate jet used by the      
    company's executives
    14. The cost of renting rooms at a Florida resort for the      
    annual sales conference
    15. The cost of packaging the company's product      

    Required: For each cost item, indicate whether it would be variable or fixed with respect to the number
    of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a
    manufacturing cost. If it is a manufacturing cost, indicate whether it would typically be treated as a direct
    cost or an indirect cost with respect to units of product.

    Problem 2: (Cost of Quality) James Company’s quality cost report is to be based on the following data:

    Technical support provided to suppliers 20,000


    Test and inspection of in-process goods 67,000
    Depreciation of test equipment 68,000
    Quality data gathering, analysis, and reporting 46,000
    Warranty repairs and replacements 97,000
    Debugging software errors 22,000
    Downtime caused by quality problems 95,000
    Returns arising from quality problems 12,000
    Supervision of testing and inspection activities 24,000
    Required: Compute the amount to be presented as Preventive Costs, Appraisal Costs, Internal Failure
    Costs, and External Failure Costs.

    Problem 3: (COGM and COGS) Loboc Corporation manufactures a variety of products in its factory.
    Data for the most recent month’s operations appear below:

    Beginning raw materials inventory 60,000


    Ending raw materials inventory 45,000
    Direct labor 135,000
    Purchases of raw materials 690,000
    Manufacturing overhead 370,000
    Beginning work in process inventory 120,000
    Ending work in process inventory 130,000
    Beginning finished goods inventory 200,000
    Ending finished goods inventory 220,000

    Required: Compute the company’s cost of goods manufactured and cost of goods sold.

    Problem 4 (Cost Behavior): Complete the following table:

      500 units 1,000 units 2,000 units

    Variable cost per unit 20  D.  I.


    Fixed cost per unit  A.  E.  J.
           
    Total variable cost  B.  F.  K.
    10,0
    Total fixed costs 00  G.  L.
    Total costs  C.  H.  M.

    Problem 5: (Cost Behavior) The following data were taken from the income statement of Batangas
    Corporation.

    Units Produced 10,000 12,000 14,000


    Utilities 20,000 24,000 28,000
    Salaries and Wages 70,000 80,000 90,000
    Depreciation 40,000 40,000 40,000
    Repairs and Maintenance 30,000 36,000 42,000
    Indirect Materials 45,000 53,000 61,000

    Required: Identify each of the company’s expenses as either variable, fixed, or mixed costs.
    Problem 6 (High-Low & Least Square) Pampanga Corporation provides a personalized training
    program that is popular with many companies. The number of programs offered over the last five months,
    and the costs of offering programs are as follows:
    X Y
    Month Programs Offered Cost Incurred (Php)

    June 55 154
    July 45 140
    August 50 147
    September 50 147
    October 75 190

    Required:
    1. Using the high-low method, compute the variable cost and total fixed cost per program.
    2. Using the least square method, compute the variable cost per unit and total fixed cost of the
    program.

    Problem 7: (High-Low and Least Square) As a part of a cost study, the cost accountant of Rizal
    Corporation has recorded the cost of operations at seven different levels of material usage. This
    information is shown as follows:

    Kilos of Materials Cost of Operations


    100 P1,000
    75 600
    25 400
    150 1,500
    175 1,600
    50 600
    125 1,300

    Additional information:
     Sum of the kilos ( ∑X ) 700
     Sum of the costs ( ∑Y ) P 7,000
     Sum of the kilos multiplied by costs ( ∑XY ) P 852,500
     Sum of the kilos squared ( ∑X2 ) 87,500

    Required: (RP-CPA Adapted)


    1. Using the high-low method, the variable cost of operations per kilo of materials used is?
    2. Using the high-low method, the fixed cost of operation is?
    3. Using the least square method, the average rate of variability per kilo of materials used is?

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