Batch 6

1
Batch 6

• Assessment

2

• The following costs have been accrued for ABC
  Company for the month.
• Direct labor 210000
• Indirect labor 85000
• Supervision 32000
• Sales commission 40000
• Sale Salaries 18000

3

• Classify the following
• 1. period costs
• 2. product costs
• 3. fixed costs
• 4. variable costs

4

• Solution
• 1. Period costs marketing costs admin costs.
• Ie
• Sales commission Sales salaries
• 4000018000 58000

5

• Product cost D.labor In. Labor Supervision
• 210000 85000 32000 327000
• 3. Fixed costs Sales salaries Supervision
• 32000 18000 50000

6

• Variable cost DLabor indirect labor sales
  commission
• 210000 8500040000 335000

7

• Question 2
• The following information is from the books of a
  company at the end of the period.
• Direct labor 140000
• Sales commission 30000
• Property tax on factory building 50000
• Var. manf. Overhead 70000
• Advertising expense 100000

8

• Factory depreciation 60000
• Direct materials used 130000
• Required
• 1. Fixed manfacturing overhead
• 2. prime cost
• 3. Manufacturing cost for the period
• 4. Conversion cost

9

• 5. Variable manufacturing cost
• 6. Total variable cost
• 7. Direct product cost
• 8. Total period cost.

10

• Solution
• 1. Fixed manf. Cost property tax depreciation
  
• 5000060000 110000
• 2. Prime cost DM DL
• 130000140000 270000
• 3. M. cost DLDM PTVOHDep
• 140000130000500007000060000450000

11

• 4. Conversion cost OH DL
• PTVOHDepDL
• 500007000060000140000320000
• 5. VM cost DMDLVOH
• 130000140000 70000 340000
• 6. Total V.C DMDLVOHSales commission
• 130000140000 7000030000 370000

12

• Direct product cost DM DL
• 130000140000 270000
• Total period cost Sales com Advertising
• 30000100000 130000

13

• Question 3
• The following are from the books of a company at
  the end of April ( all figures are in thousands).
• 1 April
  30. April
• Cash 56 42
• Accounts reci. 200 220
• WIP 120 116
• Materials 41 47

14

• The following are from the books of a company
  month of April ( all figures are in thousands).
• 1 April
  30. April
• Cash 66 40
• Accounts reci. 180 220
• WIP 100 116
• Materials 41 47

15

• F.Goods 135 100
• Acc. Payable 15 18
• Raw.Mat.Purcahse - 80
• Direct Lab.Payable 30 35
• D.labor - 140
• In.production cost - 93
• Selling Expense - 85
• Admin Expense - 90
• Sales - 510

16

• Required
• 1. Prepare the CGS statement
• 2. Prepare the income
• 3. How much is paid to suppliers?
• 4.How much is paid to direct labor?
• 5. How much is collected form customers?

17

• 1. CGS
• Direct Material 1.4 41
• Purchases 56
• Direct material available 97
• -Direct material 30.4 47
• D. Material used 50
• D. Labor 140
• D.cost of Man 190
• OH 93
• Man.cost for the period 283

18

• WIP 1.4 120
• -WIP 30.4 116
• Cost of completed goods 287
• FGI 1.4 105
• Cost of goods available for sale 392
• -FGI30.4 110
• CGS 282

19

• 2. Sales 510
• -CGS 282
• Gross margin 228
• -Selling exp. 85
• -Admin 90
• Profit 53

20

• 3.Material purchase 56
• Acc. payable balance increase 18-15 3
• Therefore the amount paid is
• 56-3 53
• 4. DL cost 140
• DL payable increase 35-30 5
• DL paid 140-5 135

21

• Collections
• Sales 510
• Increase in receivables 220-200 20
• Collections 510-20 490