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 Salaries 18000. Classify the following 1. period costs 2. product costs 3. fixed costs

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Batch 6

Batch 6

Assessment




  • Solution the month.

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

  • Ie

  • Sales commission + Sales salaries

  • = 40000+18000= 58000




  • Question 2 the month.

  • 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 expense 100000


  • Factory depreciation 60000 the month.

  • Direct materials used 130000

  • Required

  • 1. Fixed manfacturing overhead

  • 2. prime cost

  • 3. Manufacturing cost for the period

  • 4. Conversion cost



  • Solution the month.

  • 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 the month.

= 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



  • Question 3 the month.

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

  • 1 April 30. April

  • Cash 56 42

  • Accounts reci. 200 220

  • WIP 120 116

  • Materials 41 47



  • F.Goods ( all figures are in thousands). 135 100

  • Acc. Payable 15 18

  • Raw.Mat.Purcahse - 80

  • Direct Lab.Payable 30 35

  • D.labor - 140

  • In.production cost - 93

  • Selling Expense - 85

  • Admin Expense - 90

  • Sales - 510


  • Required ( all figures are in thousands).

  • 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 ( all figures are in thousands).

  • Direct Material 1.4 41

  • +Purchases 56

  • Direct material available 97

  • -Direct material 30.4 47

  • D. Material used 50

  • +D. Labor 140

  • D.cost of Man 190

  • +OH 93

  • Man.cost for the period 283


  • +WIP 1.4 120 ( all figures are in thousands).

  • -WIP 30.4 116

  • Cost of completed goods 287

  • +FGI 1.4 105

  • Cost of goods available for sale 392

  • -FGI30.4 110

  • CGS 282


  • 2. Sales 510 ( all figures are in thousands).

  • -CGS 282

  • Gross margin 228

  • -Selling exp. 85

  • -Admin 90

  • Profit 53


  • 3.Material purchase= 56 ( all figures are in thousands).

  • 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 ( all figures are in thousands).

  • Sales = 510

  • Increase in receivables= 220-200= 20

  • Collections= 510-20= 490


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