Batch 6
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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

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Batch 6

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Batch 6

Batch 6

Assessment


Batch 6

  • 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


Batch 6

  • Classify the following

  • 1. period costs

  • 2. product costs

  • 3. fixed costs

  • 4. variable costs


Batch 6

  • Solution

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

  • Ie

  • Sales commission + Sales salaries

  • = 40000+18000= 58000


Batch 6

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

  • = 210000+ 85000+ 32000= 327000

  • 3. Fixed costs= Sales salaries+ Supervision

  • = 32000+ 18000= 50000


Batch 6

  • Variable cost= DLabor+ indirect labor+ sales commission

  • = 210000+ 85000+40000= 335000


Batch 6

  • 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

  • Var. manf. Overhead 70000

  • Advertising expense100000


Batch 6

  • Factory depreciation 60000

  • Direct materials used130000

  • Required

  • 1. Fixed manfacturing overhead

  • 2. prime cost

  • 3. Manufacturing cost for the period

  • 4. Conversion cost


Batch 6

  • 5. Variable manufacturing cost

  • 6. Total variable cost

  • 7. Direct product cost

  • 8. Total period cost.


Batch 6

  • 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


Batch 6

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


Batch 6

  • Direct product cost= DM+ DL

  • = 130000+140000= 270000

  • Total period cost= Sales com+ Advertising

  • = 30000+100000= 130000


Batch 6

  • 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


Batch 6

  • 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


Batch 6

  • F.Goods135100

  • Acc. Payable1518

  • Raw.Mat.Purcahse -80

  • Direct Lab.Payable 3035

  • D.labor -140

  • In.production cost-93

  • Selling Expense -85

  • Admin Expense-90

  • Sales - 510


Batch 6

  • 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?


Batch 6

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


Batch 6

  • +WIP 1.4120

  • -WIP 30.4116

  • Cost of completed goods287

  • +FGI 1.4105

  • Cost of goods available for sale392

  • -FGI30.4110

  • CGS 282


Batch 6

  • 2. Sales510

  • -CGS282

  • Gross margin228

  • -Selling exp.85

  • -Admin90

  • Profit53


Batch 6

  • 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


Batch 6

  • Collections

  • Sales = 510

  • Increase in receivables= 220-200= 20

  • Collections= 510-20= 490


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