Chapter 3 Cost Accounting

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chapter 3

Exe# 6 In question direct labor hours is not given, we can find D.Labor hours through this formula Direct labor cost= 40000 = 6250 Hours
Per D.Labor hours rate 6.40
1) Prime Cost(2) Conversion Cost
Material opening24000Direct labor40000
+ purchase56000FOH Applied
Material available for use800006250 Hours@ 850000
- Material ending(20000)Conversion cost90000
Material used60000
+ Direct labor40000

Prime Cost100000

(3) Cost of goods manufactured (4) Cost of goods sold

Prime cost100000Cost of goods manufactured 154000
Applied FOh+ Finished goods opening 36000
6250@850000
Cost of goods available for sale 190000
Total manufacturing cost150000- Finished goods ending (40000) + WIP opening12000
Cost of goods sold 150000
Cost of Work put into process162000
- W.I.P ending(8000)

Cost of goods manufactured154000

( 5) Income statement

Sale200000
- C.G.S(150000)

Gross profit50000

Less; operation expense

Marketing and administrative
Expense (200000*10/100)(20000)

Net income30000

Exe – 4
Req(1) Estimated cost to produce or Total manufacturing cost

Direct labor 10100
Direct material 7500
FOH
Molding department ( 800*5) 4000
Finishing department =4300*120/100 5160

Total manufacturing cost 26760

Req (2) Prime cost Req (3)Conversion costDirect labor 10100 Direct material 7500FOH
Direct labor10100 Molding department (800*5) 4000
Finishing department =4300*120/100 5160
Prime cost 17600Conversion cost 19260

Req (4) Bid price/ sale price
Direct labor 10100
Direct material 7500
FOH
Molding department ( 800*5) 4000
Finishing department =4300*120/100 5160

Total manufacturing cost 26760

Markup ( 26760*40/100) 10704
Bid price 37464

Problem 3—1 Direct Material cost
Bid 1Bid 2

Part to be purchase 550900
Material: bar, strip and sheet metal130190
Pig metal5680

Material used7361170

Direct labor cost
Bid 1 Bid2

Foundry Bid 1 ( 6hrs@8.25) Bid 2(8Hrs@8.25)49.566
Machining Bid 1 ( 8hrs@7.50) Bid 2 (20hrs@7.50)60150
Electroplating Bid 1 (6hrs@8.40) Bid 2 (12hrs@8.40)50.4100.8 Assembly Bid 1 (40hrs@8) Bid 2 (70hrs@8)320560 InstallingBid 1 (0hrs@ 7) Bid2 (16hrs@ 7)0112
Direct labor cost479.9988.8

FOH cost
Bid 1 Bid2

Foundry Bid 1 ( 6hrs@3.25) Bid 2(8Hrs@3.25)19.526
Machining Bid 1 ( 8hrs@3) Bid 2 (20hrs@3)2460
Electroplating Bid 1 (6hrs@2.50) Bid 2 (12hrs@2.50)1530
Assembly Bid 1 (40hrs@2.60 Bid 2 (70hrs@2.60)104182 InstallingBid 1 (0hrs@ 1.80) Bid2 (16hrs@ 1.80)028.8
Foh Cost 162.5326.8

Total Manufacturing cost

Bid 1Bid2

Direct labor cost+D.Material cost+ FOH cost
Bid 1(736+479.9+162.2) Bid2 (1170+988.9+326.8) 1378.42485.6 + Spoilage Bid 1 (736+479.9=1215.9*5/100)60.79107.94 Bid 2 (1170+988.9= 2158.8*5/100)

Total Manufacturing cost 1439.192593.54

+ Marketing and administrative and profit
Bid 1 (1439.19*35/65= 774.95) 774.951396.52
Bid 2 (2593.54*35/65=1396.52)

Bid Price 22143990

Exe---7
Last Year
Sale price per unit = 280
- Gross profit (25% of C.G.S)280*25/125 = (56)
Per unit cost 224

Working for per unit cost 224
Direct material is 40%= 224*40/100= 89.6
Direct labor is 45% = 224*45/100 = 100.8
FoH 15% = 224*15/100= 33.6
Per unit cost 224

Gross profit=2000 units *56=112000
Coming Year

Material 89.6
+ Increase25 %( 989.6*25/100)22.4112

Direct labor100.8
+ increase 25 %(...
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