Costs and Coffee Average Cost
Exercise 2-2
Classify each cost listed below as either a product cost or a period cost for purposes of preparing the financial statements for the bank. 1. The cost of the memory chips used in radar set. * Product Cost 2. Factory Heating Cost * Period Cost 3. Factory Equipment maintenance costs. * Period Cost 4. Training costs for new administrative employees * Period Costs 5. The cost of the solder that is used in assembling the radar sets. * Product costs 6. The Travel Costs of the company’s salespersons * Product Cost 7. Wages and salaries of factory security personel * Period Cost 8. The Cost of air-conditioning executive offices * Period cost 9. Wages and Salaries in the department that handles billing customers * Period cost 10. Depreciation on the equipment in the fitness room used by factory workers. * Product Cost 11. Telephone Expenses incurered by factory management * Product Cost 12. The cost of shipping completed radar sets to customers * Product Cost 13. The Wages of workers who assemble the radar sets * Period Costs 14. The President’s Salary * Period Cost 15. Health Insurance Premiums for Factory personell * Period Cost
Exercise 2-3
Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26.
Required:
1. Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.
| Cups of Coffee Served in a Week | | 1,800 | 1,900 | 2,000 | Fixed Cost | $1,100 | $1,100 | $1,100 | Variable Cost | $0.26 | $0.26 | $0.26 | Total Cost | $1568 | $1594 | $1620 | Average cost per cup of coffee served | 0.871 | 0.839 | 0.810 |
We know,
Classify each cost listed below as either a product cost or a period cost for purposes of preparing the financial statements for the bank. 1. The cost of the memory chips used in radar set. * Product Cost 2. Factory Heating Cost * Period Cost 3. Factory Equipment maintenance costs. * Period Cost 4. Training costs for new administrative employees * Period Costs 5. The cost of the solder that is used in assembling the radar sets. * Product costs 6. The Travel Costs of the company’s salespersons * Product Cost 7. Wages and salaries of factory security personel * Period Cost 8. The Cost of air-conditioning executive offices * Period cost 9. Wages and Salaries in the department that handles billing customers * Period cost 10. Depreciation on the equipment in the fitness room used by factory workers. * Product Cost 11. Telephone Expenses incurered by factory management * Product Cost 12. The cost of shipping completed radar sets to customers * Product Cost 13. The Wages of workers who assemble the radar sets * Period Costs 14. The President’s Salary * Period Cost 15. Health Insurance Premiums for Factory personell * Period Cost
Exercise 2-3
Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26.
Required:
1. Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.
| Cups of Coffee Served in a Week | | 1,800 | 1,900 | 2,000 | Fixed Cost | $1,100 | $1,100 | $1,100 | Variable Cost | $0.26 | $0.26 | $0.26 | Total Cost | $1568 | $1594 | $1620 | Average cost per cup of coffee served | 0.871 | 0.839 | 0.810 |
We know,