COST ACCOUNTING
NOTE: Be sure to show all your detailed
calculations. This has the possibility of partial credit for the exercises.
There isnât any partial credit for the questions.
I.
Questions
1. What are the three types
of management decisions?
2. Which type of management
decision involves the cost volume profit analysis?
3. What type(s) of cost are
included under conversion cost and prime cost?
4. Provide two examples of
committed fixed cost and two examples of discretionary fixed cost.
5. Define segment reporting
and provide two examples of segments.
II. Exercises
1. Leslie Manufacturing
reported the following:
Revenue
$450,000
Beginning inventory of direct materials,
January 1, 2015
20,000
Purchases of direct materials
156,000
Ending inventory of direct materials,
December 31, 2015
18,000
Direct manufacturing labor
21,000
Indirect manufacturing costs (factory
overhead)
42,000
Beginning work-in-process January 1, 2015
38,000
Ending work-in-process December 31, 2015
62,000
Beginning inventory of finished goods,
January 1, 2015
40,000
Ending inventory of finished goods,
December 31, 2015
45,000
Operating costs
150,000
Required:
1) What is Leslie’s cost of goods cost of
goods manufactured?
2) What is Leslie’s cost of goods sold?
3) What is Leslieâs gross profit (or gross
margin)?
2. The following information
is provided for Samsonite Manufacturing Company for 2015:
Ending finished goods, 12/31/15 $5,500,000
Raw material purchases during 2015 $
650,000
Accounts payable
1/31/15 $1,810,000
Beginning raw
materials inventory 1/1/15 $ 725,000
Cost of goods
manufactured $3,250,000
Cost of goods sold $2,750,000
Ending raw materials inventory 1/31/15 500,000
Required:
Determine the beginning
finished good at 1/1/15?
3. The Holiday Card Company, a producer of
specialty cards, has asked you to complete their breakeven point (number of
cards) based upon the following information:
Income tax rate 30%
Selling price per unit $6.60
Variable cost per unit $5.28
Total fixed costs $46,200.00
Required:
How many cards must be sold to
earn an after-tax net income of $18,480?
4. Given the following
information determine the unit variable cost:
·
Unit selling price $200
·
Fixed cost $100,000
·
Operating income $40,000
·
Number of units required 1,000
5. A company has annual
fixed cost of $20,000 which is not affected by different volumes of units sold.
Variable cost per unit is $10. The company estimates that its product demand
under different level of demand amounts in units is as follows at various unit
selling prices:
Choice
Demand in units
Unit Selling Price
1
18,000
$11
2
15,000
$12
3
11,000
$13
4
8,000
$14
Required: What price should
be set for the product?
6.
Consider the following information:
Units made
1,200
Units sold
950
Variable
manufacturing costs per unit
$ 45
Variable
selling costs per unit
$ 30
Fixed
manufacturing costs per unit
$ 25
Fixed
selling costs
$ 25,000
Beginning
inventory (in units)
0
Ending
inventory (in units)
400
Unit selling
price
$200
Prepare a variable costing and absorption costing
income statement.
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