Basic Cost Concept
ASSIGNMENT 1 : BASIC COST CONCEPT
NAME :
MATRICS NUMBER : ANSWER Q1 :
Product cost is a cost related to the goods that were purchased in order to produce the certain product. Product cost is important to value the inventory of manufactured goods until the goods are sold. The cost of manufactured inventory are product cost. All cost incurred in manufacturing finished goods are stored in inventory until the product are sold. The product cost of the inventory sold become cost of goods sold and appear as an expenses on the income statement.
ANSWER Q2 : ITEM | PRODUCT/PERIOD COST | VARIABLE/FIXED | | PRODUCT | PERIOD | VARIABLE | FIXED | a) Tomatoes used in the manufacture of Hunts ketchup | X | | X | | b) Administrative salaries of executives employed by Jet Blue Airlines | | X | | X | c) Wages of assembly-line workers at Ford plant | X | | | X | d) Marketing expenditures of Atlanta Braves baseball club | | X | X | | e) Commissions paid to Coca-cola’s salesperson | | X | X | | f) Straight-line depreciation on manufacturing equipment owned by Dell Computer | X | | | X | g) Shipping chargers incurred by Office Depot on out-going orders | | X | | X | h) Speakers used in Sony home Theatre systems | X | | X | | i) Insurance cost related to a Mary Kay Cosmetics’ manufacturing plant | X | | | X |
ANSWER Q3 : ITEMS | AIR ASIA | PROTON | GIANT | a) Disclose operating expenses on the income statement | X | X | X | b) Have product cost | | x | x | c) Have period cost | x | x | X | d) Disclose cost of goods sold on income statement | | X | X | e) Have no meaningful investment in inventory | X | | | f) Maintain raw-material, work in process, and finished goods inventories | | X | | g) Have variable n fixed costs | X | X | X |
ANSWER Q4 : a) Determine the selling price per unit :
COGS/unit = $250,000/12,500 unit
= $20
Selling price/unit
NAME :
MATRICS NUMBER : ANSWER Q1 :
Product cost is a cost related to the goods that were purchased in order to produce the certain product. Product cost is important to value the inventory of manufactured goods until the goods are sold. The cost of manufactured inventory are product cost. All cost incurred in manufacturing finished goods are stored in inventory until the product are sold. The product cost of the inventory sold become cost of goods sold and appear as an expenses on the income statement.
ANSWER Q2 : ITEM | PRODUCT/PERIOD COST | VARIABLE/FIXED | | PRODUCT | PERIOD | VARIABLE | FIXED | a) Tomatoes used in the manufacture of Hunts ketchup | X | | X | | b) Administrative salaries of executives employed by Jet Blue Airlines | | X | | X | c) Wages of assembly-line workers at Ford plant | X | | | X | d) Marketing expenditures of Atlanta Braves baseball club | | X | X | | e) Commissions paid to Coca-cola’s salesperson | | X | X | | f) Straight-line depreciation on manufacturing equipment owned by Dell Computer | X | | | X | g) Shipping chargers incurred by Office Depot on out-going orders | | X | | X | h) Speakers used in Sony home Theatre systems | X | | X | | i) Insurance cost related to a Mary Kay Cosmetics’ manufacturing plant | X | | | X |
ANSWER Q3 : ITEMS | AIR ASIA | PROTON | GIANT | a) Disclose operating expenses on the income statement | X | X | X | b) Have product cost | | x | x | c) Have period cost | x | x | X | d) Disclose cost of goods sold on income statement | | X | X | e) Have no meaningful investment in inventory | X | | | f) Maintain raw-material, work in process, and finished goods inventories | | X | | g) Have variable n fixed costs | X | X | X |
ANSWER Q4 : a) Determine the selling price per unit :
COGS/unit = $250,000/12,500 unit
= $20
Selling price/unit