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Assignment No. 1 - Cost - Concepts and Classifications

1. The document contains 4 problems related to cost accounting concepts. Problem 1 asks to compute variable manufacturing cost, variable cost, manufacturing cost, and cost to make and sell per unit given sales data. Problem 2 uses the high-low method to compute variable cost per machine hour, fixed electricity costs, and total electricity costs. Problem 3 separates semi-variable electricity expenses into fixed and variable components. Problem 4 uses the high-low and least squares methods to estimate fixed and variable overhead costs based on machine hours. 2. Problem 1 provides sales and cost data and asks to compute various per unit costs. Problem 2 provides electricity cost and machine hour data by month and asks to compute

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266 views

Assignment No. 1 - Cost - Concepts and Classifications

1. The document contains 4 problems related to cost accounting concepts. Problem 1 asks to compute variable manufacturing cost, variable cost, manufacturing cost, and cost to make and sell per unit given sales data. Problem 2 uses the high-low method to compute variable cost per machine hour, fixed electricity costs, and total electricity costs. Problem 3 separates semi-variable electricity expenses into fixed and variable components. Problem 4 uses the high-low and least squares methods to estimate fixed and variable overhead costs based on machine hours. 2. Problem 1 provides sales and cost data and asks to compute various per unit costs. Problem 2 provides electricity cost and machine hour data by month and asks to compute

Uploaded by

Dan Ryan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Pamantasan ng Cabuyao

Katapatan Homes, Brgy. Banay- Banay, City of Cabuyao, Laguna


Managerial Accounting
Costs, Concepts and Classification

ASSIGNMENT 1

Name: Score:
Course and Section: Date:

Problem I

Given the following facts, complete the requirements below:

Sales Price P 200 per unit


Fixed Costs:
Marketing and Administrative 24,000 per period
Manufacturing Overhead 30,000 per period
Variable Costs:
Marketing and Administrative 6 per unit
Manufacturing Overhead 9 per unit
Direct Labor 30 per unit
Direct Materials 60 per unit
Units produced and sold 1,200 per period

Required: Compute for the following

1. Variable manufacturing cost per unit


2. Variable cost per unit
3. Manufacturing cost per unit
4. Cost to make and sell per unit

Problem II

Westinghouse Company manufactures major appliances. Because of growing interest in its product, it has
just had its most successful year. In preparing the budget for next year, its controller compiled these data.
Month Volume in Electricity Cost
Machine Hours
July 6,000 P 60,000
August 5,000 53,000
September 4,500 49,500
October 4,000 46,000
November 3,500 42,500
December 3,000 39,000
6- month Total 26,000 P 290,000

Using the high- low method, compute:

1. The variable cost per machine hour


2. The monthly fixed electricity costs
3. The total electricity costs if 4,800 machine hours are projected to be used next month.

Problem III

Naol Corporation is preparing a flexible budget and desires to separate its electricity expense, which is
semi- variable and fluctuates with total machine hours, into its fixed and variable components.
Information for the first three months of 2020 is as follows:

Machine Hours Electricity Expense


January 3,500 P 31,500
February 2,000 20,000
March 4,000 35,600

Requirements:

1. Compute the variable rate per machine hour.


2. Compute the fixed portion of Naol’s electricity expense.
3. Compute the total manufacturing costs if Naol’s actual machine hours are 4,500.

Problem IV

Cobain Motors Co. makes motorcycles. Management wants to estimate overhead costs to plain its
operations. A recent trade publication revealed that overhead costs tend to vary with machine hours. To
check this, they collected the following data for the past 12 months.
Month Machine Hours Overhead Costs
1 175 P 4,500
2 170 4,225
3 160 4,321
4 190 5,250
5 175 4,800
6 200 5,100
7 160 4,450
8 150 4,200
9 210 5,475
10 180 4,760
11 170 4,325
12 145 3,975

Requirements:

1. Use the high- low method to estimate the fixed and variable portion of overhead costs based on
machine hours.
2. If the plant is planning to operate at a level of 300 machine hours next period, what would be the
estimated overhead costs?
3. Use the method of least square to estimate the fixed and variable portion of overhead costs based
on machine hours.

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