# Batch 6 - PowerPoint PPT Presentation

1 / 21

Batch 6. Assessment. The following costs have been accrued for ABC Company for the month. Direct labor\$210000 Indirect labor 85000 Supervision 32000 Sales commission 40000 Sale Salaries18000. Classify the following 1. period costs 2. product costs 3. fixed costs

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Batch 6

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

## Batch 6

Assessment

• The following costs have been accrued for ABC Company for the month.

• Direct labor\$210000

• Indirect labor 85000

• Supervision 32000

• Sales commission 40000

• Sale Salaries18000

• Classify the following

• 1. period costs

• 2. product costs

• 3. fixed costs

• 4. variable costs

• Solution

• 1. Period costs= marketing costs+ admin costs.

• Ie

• Sales commission + Sales salaries

• = 40000+18000= 58000

• Product cost = D.labor+ In. Labor+ Supervision

• = 210000+ 85000+ 32000= 327000

• 3. Fixed costs= Sales salaries+ Supervision

• = 32000+ 18000= 50000

• Variable cost= DLabor+ indirect labor+ sales commission

• = 210000+ 85000+40000= 335000

• 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

• Factory depreciation 60000

• Direct materials used130000

• Required

• 2. prime cost

• 3. Manufacturing cost for the period

• 4. Conversion cost

• 5. Variable manufacturing cost

• 6. Total variable cost

• 7. Direct product cost

• 8. Total period cost.

• Solution

• 1. Fixed manf. Cost = property tax+ depreciation

• = 50000+60000= 110000

• 2. Prime cost= DM+ DL

• 130000+140000= 270000

• 3. M. cost= DL+DM+ PT+VOH+Dep

• = 140000+130000+50000+70000+60000=450000

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

• Direct product cost= DM+ DL

• = 130000+140000= 270000

• Total period cost= Sales com+ Advertising

• = 30000+100000= 130000

• 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 5642

• Accounts reci. 200220

• WIP120116

• Materials 4147

• The following are from the books of a company month of April ( all figures are in thousands).

• 1 April 30. April

• Cash 6640

• Accounts reci. 180220

• WIP100116

• Materials 4147

• F.Goods135100

• Acc. Payable1518

• Raw.Mat.Purcahse -80

• Direct Lab.Payable 3035

• D.labor -140

• In.production cost-93

• Selling Expense -85

• Sales - 510

• 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?

1. CGS

• Direct Material 1.441

• +Purchases56

• Direct material available 97

• -Direct material 30.447

• D. Material used50

• +D. Labor 140

• D.cost of Man190

• +OH 93

• Man.cost for the period283

• +WIP 1.4120

• -WIP 30.4116

• Cost of completed goods287

• +FGI 1.4105

• Cost of goods available for sale392

• -FGI30.4110

• CGS 282

• 2. Sales510

• -CGS282

• Gross margin228

• -Selling exp.85

• Profit53

• 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

• Collections

• Sales = 510

• Increase in receivables= 220-200= 20

• Collections= 510-20= 490