Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 550 views

    BACOSTMX Module 2 Learning Activity 2

    Uploaded by

    lc
    The document provides information about cost accounting and cost behavior. It contains three parts that provide examples of different costs and ask the reader to classify each cost as either variable or fixed based on the number of units produced. It also contains problems involving analyzing overhead costs, variable costs, fixed costs, and using the high-low method and least squares regression to estimate cost equations for mixed costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    BACOSTMX Module 2 Learning Activity 2

    Uploaded by

    lc
    550 views7 pages
    The document provides information about cost accounting and cost behavior. It contains three parts that provide examples of different costs and ask the reader to classify each cost as either variable or fixed based on the number of units produced. It also contains problems involving analyzing overhead costs, variable costs, fixed costs, and using the high-low method and least squares regression to estimate cost equations for mixed costs.

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document provides information about cost accounting and cost behavior. It contains three parts that provide examples of different costs and ask the reader to classify each cost as either variable or fixed based on the number of units produced. It also contains problems involving analyzing overhead costs, variable costs, fixed costs, and using the high-low method and least squares regression to estimate cost equations for mixed costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    550 views7 pages

    BACOSTMX Module 2 Learning Activity 2

    Uploaded by

    lc
    The document provides information about cost accounting and cost behavior. It contains three parts that provide examples of different costs and ask the reader to classify each cost as either variable or fixed based on the number of units produced. It also contains problems involving analyzing overhead costs, variable costs, fixed costs, and using the high-low method and least squares regression to estimate cost equations for mixed costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 7

    COST ACCOUNTING AND CONTROL

    1st Term., A.Y. 2020-2021


    BACOSTMX
    Module 2 - Cost Behavior and Accounting for Cost Flows
    Activity 2

    NAME: Caddawan, Alyssa Kaye T. SCORE: __________


    YR./ SEC.: ACT-19A DATE: August 26, 2020

    GENERAL DIRECTION:
    Read and analyze the following questions and type your answer in the space provided in each item.

    Part I.

    Listed below are costs found in various organizations. For each cost item, indicate whether it would
    be variable or fixed with respect to the number of units produced and sold by typing the letter in the
    space provided for each item.

    a. Variable Cost b. Fixed Cost

    B 1. Property taxes, factory.

    A 2. Boxes used for packaging detergent produced by the company.

    A 3. Salespersons’ commissions.

    B 4. Supervisor’s salary, factory.

    B 5. Depreciation, executive autos.

    A 6. Wages of workers assembling computers.

    B 7. Insurance; finished goods warehouses.

    A 8. Lubricants for production equipment.

    B 9. Advertising costs.

    A 10. Microchips used in producing calculators.

    A 11. Shipping costs on merchandise sold.

    B 12. Magazine subscriptions, factory lunchroom.

    A 13. Thread in a garment factory.


    A 14. Billing costs.

    B 15. Executive life insurance.

    A 16. Ink used in textbook production.

    A 17. Fringe benefits, assembly-line workers.

    A 18. Yarn used in sweater production.

    B 19. Wages of receptionist, executive offices.

    Part II.

    Various costs associated with the operation of factories are given below:

    Required:
    Classify each cost as either variable or fixed with respect to the number of units
    produced and sold. (Type the letter of your answer)

    a. Variable cost b. Fixed cost

    A 20. Electricity to run production equipment.

    B 21. Rent on a factory building.

    A 22. Cloth used to make drapes.

    B 23. Production superintendent’s salary.

    A 24. Wages of laborers assembling a product.

    B 25. Depreciation of air purification equipment used to make furniture.

    B 26. Janitorial salaries.

    A 27. Peaches used in canning fruit.

    A 28. Lubricants for production equipment.

    A 29. Sugar used in soft-drink production.

    B 30. Property taxes on the factory.

    A 31. Wages of workers painting a product.

    B 32. Depreciation on cafeteria equipment.

    B 33. Insurance on a building used in producing helicopters.


    A 34. Cost of rotor blades used in producing helicopters.

    Part III.
    The Pate Company reported the following:

    Month 1 Month 2
    Units sold...... 6,000 8,000
    Cost A........... $35,000 $36,000
    Cost B........... $16,000 $16,000
    Cost C........... $1,500 $2,000
    Cost D........... $12,000 $16,000
    Cost E........... $6,000 $8,000
    Cost F........... $2,000 $2,000
    Cost G........... $4,200 $8,400
    Cost H........... $37,300 $44,600
    Cost I............. $13,000 $13,500
    Cost J............ $10,000 $12,200

    Required:
    Indicate whether each of the costs above is probably a variable, mixed or fixed cost.
    (Type the letter of your answer)

    a. Variable Cost c. Fixed cost


    b. Mixed Cost

    B 35. Cost A

    C 36. Cost B

    A 37. Cost C

    A 38. Cost D

    A 39. Cost E

    C 40. Cost F

    B 41. Cost G

    B 42. Cost H

    B 43. Cost I

    B 44. Cost J
    Part III. Problem Solving

    Problem 1
    ABC Company's total overhead costs at various levels of activity are presented below:

    Machine Hours Total Overhead Costs


    March......... 60,000 $216,800
    April............ 50,000 $194,000
    May............ 70,000 $239,600
    June........... 80,000 $262,400

    Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance.
    At the 50,000 machine-hour level of activity these costs are:

    Utilities (V)..................................... $ 54,000


    Supervisory salaries (F)................ 62,000
    Maintenance (M)...........................    78,000
    Total overhead cost....................... $194,000

    V = Variable; F = Fixed; M = Mixed

    The company wants to break down the maintenance cost into its basic variable and
    fixed cost elements.

    45. Estimate the maintenance cost for June.


    – 114000

    46. Use the high-low method to estimate the cost formula for maintenance cost.
    – Cost Formula: Y = 18000 + 1.20X

    47. Estimate the total overhead cost at an activity level of 55,000 machine hours.
    – 205400

    Problem 2
    Hinrichs Corporation reports that at an activity level of 2,400 units, its total variable cost is $174,504
    and its total fixed cost is $55,080.

    Required:
    For the activity level of 2,700 units, compute:

    48. The total variable cost – 196317


    49. The total fixed cost – 55080
    50. The total cost – 251397
    51. The average variable cost per unit – 72.71 per unit
    52. The average fixed cost per unit – 20.40 per unit
    53. The average total cost per unit. Assume that this activity level is within the relevant range.
    – 93.11 per unit
    Problem 3:
    Green Shade manufactures insulated windows. The firm's repair and maintenance (R&M) cost is
    mixed and varies directly with machine hours worked. The following data have been gathered from
    recent operations:

    Month MHs R&M Cost


    May 1400 9000
    June 1900 10719
    July 2000 10900
    August 2500 13000
    September 2200 11578
    October 2700 13160
    November 1700 9525
    December 2300 11670

    a. Use high-low method to estimate the total fixed cost component of the repair and maintenance
    cost. – 4520

    b. Use high-low method to estimate the variable cost per machine hour for repair and maintenance
    cost. – 3.20 per MHs

    c. Use least-squares regression to estimate the total fixed cost component of the repair and
    maintenance cost. (Round-off to five decimal places) – 4026.36

    d. Use the least-squares regression to estimate the variable cost per machine hour for repair and
    maintenance cost. (Round-off to five decimal places) – 3.43278 per MHs
    Solution:

    1 2 3 4 5 6

    R&M Cost Machine Activity

    Month Cost ( ) Deviation Hours ( ) Deviation (4) Squared (4) x (2)

    May 9,000 (2,194) 1,400 (688) 473,344 1,509,472

    June 10,719 (475) 1,900 (188) 35,344 89,300

    July 10,900 (294) 2,000 (88) 7,744 25,872

    August 13,000 1806 2,500 412 169,744 744,072

    September 11,578 384 2,200 112 12,544 43,008

    October 13,160 1,966 2,700 612 374,544 1,203,192

    November 9,525 (1,669) 1,700 (388) 150,544 647,572

    December 11,670 476 2,300 220 48,400 104,720

    SUM (∑) 89,552 16,700 1,272,208 4,367,208

    AVERAGE 11,194 2,088

    Variable Cost per unit

    Total Fixed Cost

    You might also like