Cost Acctg. (De Leon)

Cost Accounting
Chapter 2 - Costs – Concepts and classification

Problem 1 Problem 2
1. Direct 9. Direct 1. Manufacturing 6. Manufacturing
2. Indirect 10.Direct 2. Selling 7. Administrative
3. Direct 11.Indirect 3. Manufacturing 8. Selling
4. Direct 12.Direct 4. Selling 9. Administrative
5. Direct 13.Direct 5. Administrative 10.Selling
6. Direct 14.Direct
7. Direct 15.Indirect
8. Indirect

Problem 3
1. Variable Product Direct
2. Variable Product Direct
3. Fixed Product Indirect
4. Variable Product Direct
5. Fixed Product Indirect
6. Fixed Period Indirect
7. Fixed Period Indirect
8. Variable Period Direct
9. Fixed Product Indirect
10.Fixed Period Indirect

Problem 4 – Bug Company
1. Fixed Period 6. Variable Period
2. Fixed Inventoriable 7. Variable Inventoriable
3. Fixed Inventoriable 8. Fixed Inventoriable
4. Variable Inventoriable 9. Fixed Period
5. Fixed Inventoriable 10. Fixed Inventoriable

Problem 5 – Mighty Muffler, Inc.
a. P 60,000
b. P 60,000
c. P 37,500 = P50/muffler x 500 = P 25,000 750
d. P 50 x 1,000 = P 50,000
e. P 60,000 + P 25,000 = P 85,000
f. P 60,000 + P 50,000 = P 110,000
g. P 60,000/ 500 = P 120
h. P 60,000/750 = P 80
I, P 60,000/1,000 = P 60
j. P 50
k. P 50
l. P 50
m. P 120 + P 50 = P 170
n. P 80 + P 50 = P 130
o. P 60 + P 50 = P 110

Problem 6 – JP Morgan
1. b, c. i
2. a, c, i
3. a, c, i
4. a, c. h
5. b. d, i
6. g
7. e, f (correction – should be when one additional loan application is processed)
8. b, d, i
9. a, c, i
10. b, c,

Problem 7 – Mother Goose Company 1. Prime costs - 530,000 2. Conversion cost - 575,000 3 Inventoriable cost - 860,000 4. Total period costs - 305,000

Problem 8 –
a. c - fixed (total amount is constant)
b. a – variable (4,480/3,200 = 1.40; 6,300/4,500 = 1.40 per unit is constant)