1. Committed fixed costs are costs that can be changed easily in a relatively brief period of time. (True/False)
2. When the level of activity decreases, total variable costs
a. increase
b. decrease, but at a slower rate than the level of activity
c. a decrease in direct proportion to the decrease in activity
d. remain the same.
3. Which of the following components are included in a mixed cost?
a. A product cost and a period cost
b. A fixed cost and a variable cost
c. A step cost and a semivariable cost
d. A sunk cost and an opportunity cost
4. Within the relevant range, variable costs
a. are the same in total at different activity levels.
b. None of these answer choices are correct.
c. are the same amount per unit at any activity level.
d. per unit change when the activity level changes.
5. Step costs
a. change in total at every level of activity.
b. per unit are the same for each range of volume.
c. are classified as step variable or step fixed depending on the range of activity for which the cost remains fixed.
d. are considered to be step fixed costs within a relatively small range.
6. A cost is $34,500 at an activity level of 23,000 units and $42,000 at an activity level of 28,000 units. What type of cost is this?
a. Mixed Costs
b. Variable Costs
c. Fixed Costs
d. Sunk Cost
In: Accounting
A company has two products: standard and deluxe. The company expects to produce 38,763 Standard units and 36,637 Deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools.
|
Budgeted Activity of Cost Driver |
|||||||||
|
Budgeted OH Cost |
Standard | Deluxe | |||||||
| Activity 1: Purchasing | $ | 93,000 | 2,500 | Purchases | 5,250 | Purchases | |||
| Activity 2: Designing | $ | 92,000 | 4,500 | Designs | 5,500 |
Designs |
|||
| Activity 3: Shipping | $ | 87,000 | 3,000 | Orders | 2,800 |
Orders |
|||
Required:
Make a Job Cost Sheet for the Standard Units. Use the following Direct Materials and Direct Labor information.
- Direct Materials $5,987
- Direct Labor $7,821
For Overhead, computer overhead rates for each of the three activities. Hint, you will divide each activity's budgeted cost by the TOTAL amount of that activity's cost driver. So you will need to add Purchases for Standard and Deluxe to get the total denominator for that activity. (Round activity rate and cost per unit answers to 2 decimal places.)
Your Job Cost Sheet will include:
Direct Materials
+ Direct Labor
+ Overhead for Purchasing
+ Overhead for Designing
+ Overhead for Shipping
= Total Job Cost
/ Units Produced
= Per Unit Cost
The answer you type in will be the Per Unit Cost of the Standard Units. Round your answer to the nearest 2 decimal places
In: Accounting
(1) "Describe what is meant by "Cost Behavior".
(2) "Distinguish between a Variable Cost and Fixed Cost (in Total and Per Unit)".
(3) "Described what is a "Mixed Cost".
(4) "Discuss the purpose of uses of the "High-Low Method".
In: Accounting
Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
| Expected Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
| Product E1 | 1,100 | 10.0 | 11,000 |
| Product A7 | 400 | 5.0 | 2,000 |
| Total direct labor-hours | 13,000 | ||
The direct labor rate is $20.60 per DLH. The direct materials cost per unit for each product is given below:
| Direct Materials Cost per Unit |
|||
| Product E1 | $211.00 | ||
| Product A7 | $287.00 | ||
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Estimated | Expected Activity | |||||
| Activity Cost Pools | Activity Measures | Overhead Cost | Product E1 | Product A7 | Total | |
| Labor-related | DLHs | $ | 139,700 | 11,000 | 2,000 | 13,000 |
| Machine setups | setups | 65,880 | 1,200 | 400 | 1,600 | |
| Order size | MHs | 1,030,410 | 3,900 | 3,700 | 7,600 | |
| $ | 1,235,990 | |||||
The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
In: Accounting
1. The following cost data for the year just ended pertain to Devere company, a greeting card manager:
| USD | |
| Direct Material | 2,100,000 |
| Advertising expense | 98,000 |
| Depreciation on factory building | 115,000 |
| Direct Labour: wages | 505,000 |
| cost of finished goods inventory at year-end | 115,000 |
| indirect labour: wages | 140,000 |
| production supervisor's salary | 47,000 |
| service department cost | 100,000 |
| Direct Labour: Fringe benefits | 87,000 |
| Indirect labour: fringe benefits | 31,000 |
| Benefits for a production supervisor | 10,000 |
| total overtime premiums paid | 55,000 |
| Cost of idle time: production employees | 40,000 |
| administrative costs | 150,000 |
| office space for sales personnel | 15,000 |
| sales commissions | 5,000 |
| product promotion costs | 10,000 |
* All services are provided to manufacturing departments.
*Cost of idle is an overhead item; it is not included in the direct-labour wages given above.
* the rental of sales space was made necessary when the sales office was converted to storage space for raw material.
Required:
Calculate each of the following costs for the year just ended:
a. total prime costs
b. total manufacturing overhead costs
c. total product costs
d. Total Period costs
e. list and describe five (5) important differences between managerial and financial accounting.
In: Accounting
1) Utilizing the activity-based costing system information provided below, select the correct product margin.
|
Activity Cost Pool |
Total Cost |
Total Activity |
|
|
Assembly |
$900,000 |
6,000 |
machine-hours |
|
Processing orders |
$400,000 |
800 |
orders |
|
Inspection |
$250,000 |
250 |
inspection-hours |
The company makes 2,000 units of Product XYZ a year, requiring a
total of 500 machine-hours, 12 orders, and 20 inspection-hours per
year. The product's direct materials cost is $150.00 per unit and
its direct labor cost is $70.00 per unit. The product sells for
$300.00 per unit.
| A. |
$158,200 |
|
| B. |
$30,833 |
|
| C. |
$159,225 |
|
| D. |
$59,000 |
2) Maxwell Corporation manufactures toy building sets. For the month of May, Maxwell sold 400,000 sets. Financial information relating to the building sets is shown below:
|
Selling price |
$50 |
per unit |
|
Cost of goods sold (all variable) |
$24 |
per unit |
|
Variable selling expense |
$12 |
per unit |
|
Total fixed selling expense |
$400,000 |
|
|
Variable administrative expense |
$8 |
per unit |
|
Total fixed administrative expense |
$600,000 |
Gross margin for May is .
Contribution margin for May is .
You must enter your answer in the following format: $x,xxx
In: Accounting
Cost of Production Report
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 800 pounds, 30% completed | $4,296* | |||
| *Direct materials (800 X $4.8) | $3,840 | |||
| Conversion (800 X 30% X $1.9) | $456 | |||
| $4,296 | ||||
| Coffee beans added during August, 25,000 pounds | 118,750 | |||
| Conversion costs during August | 50,080 | |||
| Work in process, August 31, 1,300 pounds, 60% completed | ? | |||
| Goods finished during August, 24,500 pounds | ? | |||
All direct materials are placed in the process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
| Morning Brew Coffee Company | |||
| Cost of Production Report-Roasting Department | |||
| For the Month Ended August 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, August 1 | |||
| Received from materials storeroom | |||
| Total units accounted for by the Roasting Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August 1 | |||
| Started and completed in August | |||
| Transferred to finished goods in August | |||
| Inventory in process, August 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August in Roasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit (2) | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August 1 | $ | ||
| Costs incurred in August | |||
| Total costs accounted for by the Roasting Department | $ | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, August 1 balance | $ | ||
| To complete inventory in process, August 1 | $ | $ | |
| Cost of completed August 1 work in process | $ | ||
| Started and completed in August | |||
| Transferred to finished goods in August (3) | $ | ||
| Inventory in process, August 31 (4) | |||
| Total costs assigned by the Roasting Department | $ | ||
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit |
In: Accounting
11. Cost of Production Report
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 700 pounds, 60% completed | $2,534* | |||
| *Direct materials (700 X $2.9) | $2,030 | |||
| Conversion (700 X 60% X $1.2) | $504 | |||
| $2,534 | ||||
| Coffee beans added during August, 22,000 pounds | 62,700 | |||
| Conversion costs during August | 27,963 | |||
| Work in process, August 31, 1,100 pounds, 30% completed | ? | |||
| Goods finished during August, 21,600 pounds | ? | |||
All direct materials are placed in process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
| Morning Brew Coffee Company | |||
| Cost of Production Report-Roasting Department | |||
| For the Month Ended August 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, August 1 | |||
| Received from materials storeroom | |||
| Total units accounted for by the Roasting Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August 1 | |||
| Started and completed in August | |||
| Transferred to finished goods in August | |||
| Inventory in process, August 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August in Roasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit (2) | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August 1 | $ | ||
| Costs incurred in August | |||
| Total costs accounted for by the Roasting Department | $ | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, August 1 balance | $ | ||
| To complete inventory in process, August 1 | $ | $ | |
| Cost of completed August 1 work in process | $ | ||
| Started and completed in August | |||
| Transferred to finished goods in August (3) | $ | ||
| Inventory in process, August 31 (4) | |||
| Total costs assigned by the Roasting Department | $ | ||
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | Decrease | $ |
| Change in conversion cost per equivalent unit | Increase |
In: Accounting
Cost of Production Report
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 1,000 pounds, 60% completed | $4,960* | |||
| *Direct materials (1,000 X $4) | $4,000 | |||
| Conversion (1,000 X 60% X $1.6) | $960 | |||
| $4,960 | ||||
| Coffee beans added during August, 31,000 pounds | 122,450 | |||
| Conversion costs during August | 52,564 | |||
| Work in process, August 31, 1,600 pounds, 70% completed | ? | |||
| Goods finished during August, 30,400 pounds | ? | |||
All direct materials are placed in the process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
| Morning Brew Coffee Company | |||
| Cost of Production Report-Roasting Department | |||
| For the Month Ended August 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, August 1 | |||
| Received from materials storeroom | |||
| Total units accounted for by the Roasting Department | |||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August 1 | |||
| Started and completed in August | |||
| Transferred to finished goods in August | |||
| Inventory in process, August 31 | |||
| Total units to be assigned costs | |||
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August in Roasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit (2) | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August 1 | $ | ||
| Costs incurred in August | |||
| Total costs accounted for by the Roasting Department | $ | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, August 1 balance | $ | ||
| To complete inventory in process, August 1 | $ | $ | |
| Cost of completed August 1 work in process | $ | ||
| Started and completed in August | $ | $ | |
| Transferred to finished goods in August (3) | $ | ||
| Inventory in process, August 31 (4) | $ | $ | |
| Total costs assigned by the Roasting Department | $ | ||
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit |
In: Accounting
Cost of Production Report
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
| Work in process, August 1, 1,000 pounds, 60% completed | $4,960* | |||
| *Direct materials (1,000 X $4) | $4,000 | |||
| Conversion (1,000 X 60% X $1.6) | $960 | |||
| $4,960 | ||||
| Coffee beans added during August, 31,000 pounds | 122,450 | |||
| Conversion costs during August | 52,564 | |||
| Work in process, August 31, 1,600 pounds, 70% completed | ? | |||
| Goods finished during August, 30,400 pounds | ? | |||
All direct materials are placed in the process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
| Morning Brew Coffee Company | |||
| Cost of Production Report-Roasting Department | |||
| For the Month Ended August 31 | |||
| Unit Information | |||
| Units charged to production: | |||
| Inventory in process, August 1 | ? | ||
| Received from materials storeroom | ? | ||
| Total units accounted for by the Roasting Department | ? | ||
| Units to be assigned costs: | |||
| Equivalent Units | |||
| Whole Units | Direct Materials (1) | Conversion (1) | |
| Inventory in process, August 1 | ? | ? | ? |
| Started and completed in August | ? | ? | ? |
| Transferred to finished goods in August | ? | ? | ? |
| Inventory in process, August 31 | ? | ? | ? |
| Total units to be assigned costs | ? | ? | ? |
| Cost Information | |||
| Costs per equivalent unit: | |||
| Direct Materials | Conversion | ||
| Total costs for August in Roasting Department | $ | $ | |
| Total equivalent units | |||
| Cost per equivalent unit (2) | $ | $ | |
| Costs assigned to production: | |||
| Direct Materials | Conversion | Total | |
| Inventory in process, August 1 | $ | ||
| Costs incurred in August | |||
| Total costs accounted for by the Roasting Department | $ | ||
| Costs allocated to completed and partially completed units: | |||
| Inventory in process, August 1 balance | $ | ||
| To complete inventory in process, August 1 | $ | $ | |
| Cost of completed August 1 work in process | $ | ||
| Started and completed in August | $ | $ | |
| Transferred to finished goods in August (3) | $ | ||
| Inventory in process, August 31 (4) | $ | $ | |
| Total costs assigned by the Roasting Department | $ | ||
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.
| Increase or Decrease | Amount | |
| Change in direct materials cost per equivalent unit | $ | |
| Change in conversion cost per equivalent unit |
In: Accounting