1. Batch 6 Assessment

2. The following costs have been accrued for ABC Company for the month. The following costs have been accrued for ABC Company for the month. Direct labor$210000 Direct labor$210000 Indirect labor 85000 Indirect labor 85000 Supervision 32000 Supervision 32000 Sales commission 40000 Sales commission 40000 Sale Salaries18000 Sale Salaries18000

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

4. Solution Solution 1. Period costs= marketing costs+ admin costs. 1. Period costs= marketing costs+ admin costs. Ie Ie Sales commission + Sales salaries Sales commission + Sales salaries = 40000+18000= 58000 = 40000+18000= 58000

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

6. Variable cost= DLabor+ indirect labor+ sales commission Variable cost= DLabor+ indirect labor+ sales commission = 210000+ 85000+40000= 335000 = 210000+ 85000+40000= 335000

7. Question 2 Question 2 The following information is from the books of a company at the end of the period. The following information is from the books of a company at the end of the period. Direct labor 140000 Direct labor 140000 Sales commission 30000 Sales commission 30000 Property tax on factory building 50000 Property tax on factory building 50000 Var. manf. Overhead 70000 Var. manf. Overhead 70000 Advertising expense100000 Advertising expense100000

8. Factory depreciation 60000 Factory depreciation 60000 Direct materials used130000 Direct materials used130000 Required Required 1. Fixed manfacturing overhead 1. Fixed manfacturing overhead 2. prime cost 2. prime cost 3. Manufacturing cost for the period 3. Manufacturing cost for the period 4. Conversion cost 4. Conversion cost

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

10. Solution Solution 1. Fixed manf. Cost = property tax+ depreciation 1. Fixed manf. Cost = property tax+ depreciation = 50000+60000= 110000 = 50000+60000= 110000 2. Prime cost= DM+ DL 2. Prime cost= DM+ DL 130000+140000= 270000 130000+140000= 270000 3. M. cost= DL+DM+ PT+VOH+Dep 3. M. cost= DL+DM+ PT+VOH+Dep = 140000+130000+50000+70000+60000=450000 = 140000+130000+50000+70000+60000=450000

11. 4. Conversion cost= OH+ DL = PT+VOH+Dep+DL 50000+70000+60000+140000=320000 5. VM cost= DM+DL+VOH 130000+140000+ 70000= 340000 6. Total V.C= DM+DL+VOH+Sales commission = 130000+140000+ 70000+30000= 370000

12. Direct product cost= DM+ DL Direct product cost= DM+ DL = 130000+140000= 270000 = 130000+140000= 270000 Total period cost= Sales com+ Advertising Total period cost= Sales com+ Advertising = 30000+100000= 130000 = 30000+100000= 130000

13. Question 3 Question 3 The following are from the books of a company at the end of April ( all figures are in thousands). The following are from the books of a company at the end of April ( all figures are in thousands). 1 April 30. April 1 April 30. April Cash 5642 Cash 5642 Accounts reci. 200220 Accounts reci. 200220 WIP120116 WIP120116 Materials 4147 Materials 4147

14. The following are from the books of a company month of April ( all figures are in thousands). The following are from the books of a company month of April ( all figures are in thousands). 1 April 30. April 1 April 30. April Cash 6640 Cash 6640 Accounts reci. 180220 Accounts reci. 180220 WIP100116 WIP100116 Materials 4147 Materials 4147

15. F.Goods135100 F.Goods135100 Acc. Payable1518 Acc. Payable1518 Raw.Mat.Purcahse -80 Raw.Mat.Purcahse -80 Direct Lab.Payable 3035 Direct Lab.Payable 3035 D.labor -140 D.labor -140 In.production cost-93 In.production cost-93 Selling Expense -85 Selling Expense -85 Admin Expense-90 Admin Expense-90 Sales - 510 Sales - 510

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

17. 1. CGS Direct Material 1.441 Direct Material 1.441 +Purchases56 +Purchases56 Direct material available 97 Direct material available 97 -Direct material 30.447 -Direct material 30.447 D. Material used50 D. Material used50 +D. Labor 140 +D. Labor 140 D.cost of Man190 D.cost of Man190 +OH 93 +OH 93 Man.cost for the period283 Man.cost for the period283

18. +WIP 1.4120 +WIP 1.4120 -WIP 30.4116 -WIP 30.4116 Cost of completed goods287 Cost of completed goods287 +FGI 1.4105 +FGI 1.4105 Cost of goods available for sale392 Cost of goods available for sale392 -FGI30.4110 -FGI30.4110 CGS 282 CGS 282

19. 2. Sales510 2. Sales510 -CGS282 -CGS282 Gross margin228 Gross margin228 -Selling exp.85 -Selling exp.85 -Admin90 -Admin90 Profit53 Profit53

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

21. Collections Collections Sales = 510 Sales = 510 Increase in receivables= 220-200= 20 Increase in receivables= 220-200= 20 Collections= 510-20= 490 Collections= 510-20= 490