Chapter 2âBasic Managerial Accounting Concepts
Devry ECET210 week 3 ilab
July 6, 2018Far Out Ceramics makes custom macaroni tile
July 6, 20181. Stone Company, maker of computers, incurred
the following costs during the year:
Required: Classify each cost as either fixed or
variable cost.
Fixed
Variable
1.
Salary of the factory supervisor
2.
Materials needed to assemble the computers
3.
Wages paid to an assembly line worker
4.
Depreciation on the factory
5.
Utility bill for the factory
6.
Grease used to lubricate the machine
7.
Rent paid for the factory
8.
Property taxes on the factory and corporate office
9.
Boxes used to package the completed computers
10.
Advertising in a newspaper monthly
2. Ashland Company, maker of kitchen cabinets,
incurred the following costs during the current year:
Required:Classify each cost as either a product or
period cost.
Product
Period
1.
Depreciation on automobiles used by the sales staff.
2.
Salary of Ashland’s chief executive officer
3.
Glue used in the production process
4.
Supplies for factory washroom
5.
Research and development costs
6.
Property taxes on factory building
7.
Salary of company controller
8.
Depreciation on furniture in factory lunchroom
9.
Cost of lubricating machinery
10.
Wood used in production process
3. Arcadia Company manufactures recreational vehicles and
incurred the following costs during the current year.
Required:Classify each cost using the table format
given below:
Product Cost
Period Cost
Direct
Materials
Direct
Labor
Overhead
Selling
Expense
Administrative
Expense
1.
Wages of general office personnel
2.
Cost of tires
3.
Factory supervisor’s salary
4.
Conference for marketing personnel
5.
Factory security guards
6.
Research and development
7.
Assembly line workers
8.
Company receptionist
9.
Advertising cost
10.
Cost of shipping vehicles to customers
4. The Bayou Company makes crab pots. During the
current month, direct materials costing $126,000 were put into production.
Direct labor of $78,000 was incurred and overhead equaled $84,000. Selling and
administrative expenses totaled $66,000 for the month and the company
manufactured 3,000 crab pots. Assume there was no beginning inventory and that
2,800 crab pots were sold.
Required:
A.
Compute the per-unit product cost
B.
Compute the per-unit prime cost
C.
Compute the per-unit conversion cost
D.
What is cost of goods sold for the month?
E.
What is the cost of ending finished goods for the month?
5. Ross Company makes handbags. Last month direct materials (leather, thread,
zippers, decorative accents) costing $76,000 were put into production. Ross had 30 workers, each worked 160 hours
this month and each are paid $12 per hour.
Overhead equaled $80,000 for the period.
Ross Company produced 40,000 handbags as of the end of the month.
Required:
Calculate the total product cost for the month and calculate the cost of
one handbag that was produced.