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Chapter 8 - Cost Accounting
Cost Accounting (CA 21)
Cagayan State University
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1 CHAPTER 8 Answers to Multiple Choice Theoretical 1. 2. 3. 4. 5. a d a c a 6. 7. 8. 9. 10. b c c a a Solutions to Multiple Choice Computational 1. (b) Product AB: Product CD: 2. x P13,760 x P 1,720 (c) Product AB Direct labor hours: AB: x CD: x No. of Batches: AB: x CD: x changes: AB: x CD: x Totals 3. Product CD P 8,320 P 1,040 2,240 6,720 P11,560 P19,760 (c) Traditional costing: Total hours per batch: Volume x 100 batch size 250 DLH Setup cost per hour: DLH P4 Setup cost per unit: P4 x 2 P10 ABC: Set up cost per batch 100 batch P10 4. (c) Traditional Costing System: Direct materials Direct labor (820 x P18) Applied factory overhead (P14,760 x Total factory cost P 55,500 14,760 44,280 P114,540 Unit cost (P114,540 150 units) P 763 2 Number 4 (continued) Costing System: Direct materials Direct labor Applied factory overhead: Engineering design (P30 x 330) Machine setup (P200 x 22) Machining (P25 x 732) Assembly (P8 x 1,450) Packaging and shipping (P15 x 152) Building occupancy (P6 x 732) Total factory cost Unit cost (P121,132 150 units) 5. P 55,500 14,760 P 9,900 4,400 18,300 11,600 2,280 4,392 (c) Traditional Costing: Direct materials Direct labor Applied overhead: Machine hours Predetermined overhead rate Applied overhead Divided batch size Unit cost 50,872 P121,132 P 807 P4 0 x 80 P 60 P4,800 0 P6 ABC Direct materials P4 Direct labor 0 Applied overhead: Materials handling: x 5 P0 Setup cost: 750) x 2 P840 0 Machining cost: 0 Quality control: 0 1 Unit cost P6 6. (b) Product Materials P 20 Labor 200 Applied overhead: Machine setup P400) units 4 units Testing P40 P40 x 0 hours 8 P40 x 5 hours Related to labor: hrs. 20x 500 Total hrs 30 (10 x Unit cost P262 Product P 45 400 200 220 60 P925 4 11. (d) Traditional costing (P27,500 x Costing: Material inspection: P11 x 12 P 138 In process inspection: P0 x 17,500 2,450 Product cert.: P77 x 25 1,925 Excess of ABC over traditional costing 12. P3,987 4,513 P 525 (a) Product LL ( ( 46,500) P (6,500) Product MM (133,500) P 66,500 Product LL Maintenance: LL: x MM: x Product delivery: LL: x MM: x Supervision: LL: x 22,500 MM: x Total overhead P46,500 Product MM Revenues Direct labor Overhead (Schedule 1) Income (loss) Schedule 1: 13. P 37,500 P133,500 (d) Vacuum Cleaners Revenue Manufacturing cost: Direct materials Direct labor Overhead : P8 VC: x P8 FP: x P8 Total Gross profit Divided units sold Gross profit per unit P 465 Floor Polishers P 2,200 5 14. (b) Revenue Manufacturing cost: Direct materials Direct labor Overhead: VC: x FP: P455,500 x Total Gross profit Divided units sold Gross profit per unit Vacuum Cleaners Floor Polishers P 475 318,850 3,218,850 P2,731,150 P 2,731 7 Problem 1. Multimedia Comfort Type Keyboards Keyboards Materials handling: MK: x CTK: x P15,400) Machine setup: MK: (P160 x 45) CTK: (P160 x 25) Assembly: MK: (P12 x 400) CTK: (P12 x 700) Inspection: MK: (P5 x 400) CTK: (P5 x 700) Packaging and shipping: MK: (10 x 9) CTK: (10 x 16) Total overhead costs 2. Multimedia Keyboard: P14,690 Comfort Type Keyboard: P16,830 700 P 600 P 770 7,200 4,800 8,400 3,500 90 P14,690 160 P16,830 P36 P24 Problem (a) Material handling: Machine setups: 450) Quality inspection: 600) (b) P30 per no. of requisition P60 per setup P40 per no. of inspection Product SS Materials handling: SS: (P30 x 400) HH: (P30 x 600) Machine setups: SS: (P60 x 150) HH: (P60 x 300) Quality inspection: SS: (P40 x 200) HH: (P40 x 400) Total overhead costs Product HH 8 Problem 1. 2. Overhead rate: Job 1001: x P5,600 Job 2002: Direct materials Direct labor Overhead: x Total cost Unit cost (P19,600 50) 5,600 P19,600 P392 Job 3003: Direct materials Direct labor Overhead: x Total cost Sales price: (P23,200 x P 11,200 P23,200 P34,800 Job 1001: Machine setup: 200) P100 x 8 Inspection: 6,500) P20 x 22 Material handling: P10 x 30 Engineering: x P50 x 25 Total overhead cost Job 2002: Direct materials Direct labor Overhead: Machine setup: (P100 x 10) Inspection: (P20 x 15) Material handling: (P10 x 40) Engineering: (P50 x 50) Total cost Unit cost: (P18,200 50) Job 3003: Direct materials Direct labor Overhead: Machine setup: (P100 x 14) Inspection: (P20 x 30) Material handling: (P50 x 50) Engineering: (P50 x 15) Total cost Sales price: (P17,250 x P 100 400 300 1,250 P2,050 P 300 400 2,500 4,200 P18,200 P0 P P1,400 600 2,500 750 5,250 P17,250 P25,875 10 Problem 1. Job 456 P19,400 1,500 Direct materials Direct labor Manufacturing overhead: Job 456: P230 x P50 Job 789: P230 x P750 Total manufacturing costs Divided number of units Manufacturing cost per unit 11,500 2. Direct materials Direct labor Manufacturing overhead: Materials handling: P0 x P0 x Lathe work: P0 x P0 x Milling: P40 x P40 x 2,100 Grinding: P1 x P1 x Testing: P30 x P30 x 400 Total manufacturing cost Number of units Unit manufacturing cost 3. Job 789 P119,800 22,500 P32,400 20 P 1,620 172,500 P314,800 400 P 787 Job 456 P19,400 1,500 Job 789 P119,800 22,500 800 3,200 1,600 6,400 600 P51,900 20 P 2,595 P295,900 400 P 739 The product cost figures computed in requirement 1 and 2 differ because: a. b. the job orders differ in the way the use each of five activity areas, and the activity areas differ in their indirect cost allocation bases 9specifically, each area does not use the direct manufacturing indirect cost allocation base). Problem a. Umbrellas: Gazebos: Tents: P16 P20 of an .80 x 60 minutes 48 minutes P120 P20 6 DLHs P40 P10 2 DLHs b. Umbrellas: (P16 x Gazebos: (P120 x Tents: (P40 x Total overhead cost c. Allocation rates: Quality control: P1 per unit (rounded) Setups: P200 per setup Material handling: P0 per kilo Equipment operation: P3 per MH 11 Problem (continued) Overhead Cost Allocation: Umbrellas Quality control: P1 x P1 x P1 x Setups: P200 x 400 P200 x 800 P200 x 800 Material handling: P0 x P0 x P0 x Equipment operation: P3 x P3 x P3 x Total overhead Number of units Overhead cost per unit Tents P P 28,600 P 85,800 P 9 P3,188,600 P 159 P3,005,800 P 50 P 8 12 9 P29 P 80 90 159 P329 P 8 30 50 P88 Total cost per unit: Direct materials Direct labor Overhead Total d. Gazebos If prices are set based on product costs, costing would generate lower prices for umbrellas and higher prices for the other two products. Problem 1a. Budgeted manufacturing overhead rate Budgeted manufacturing overhead Budgeted direct labor cost P5 per direct labor cost 1b. Direct materials Direct labor Manufacturing overhead (0 x P5) Total costs Budgeted selling prices per kilo: Mauna Loa (P12 x African (P10 x Mauna Loa P 8 0 3 P12 P15 P13 African P 6 0 3 P10
Chapter 8 - Cost Accounting
Course: Cost Accounting (CA 21)
University: Cagayan State University
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