Cost Management Assignment

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aCost Management
Assignment Semester 1 2011

Table of content
Detail:Pages
Introduction1
Q.NO.12
Q.No.23
Q.No.34
Q.No.45
Q.No.56
Q.No.67
Summary:8

Introduction
Cost Management delivers concise articles, experienced-based columns and case studies to evaluate how your present investment justification criteria and methods compare with those of other organizations, Learn about changing cost management methods and techniques and how they can be used to improve your company’s decision making in this assignment we going to workout calculate and try to find out different costs of company. In this assignment we going to calculate manufacturing overhead, product cost, period cost, cost of good manufactured and its income statement of the financial year, overhead rates for each activity and per unit costs and Production cost Report.

ASSIGNMENT QUESTIONSU AND ANSWERS

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QUESTION 1
Answer…
A. Manufacturing Overhead
Accounts Name| Amount ($)|
Factory utilities| 11500|
Depn. On factory equipments| 46400|
Property taxes on factory building| 2500|
Indirect factory labour| 48900|
Indirect materials| 80800|
Factory repairs| 2000|
Factory managers salary| 8000|
Total manufacturing overhead| 200100|

B. Product Costs
Accounts name| Amount ($)|
Direct Labour| 69100|
Direct material used| 137600|
Manufacturing Overhead| 200100|
Total product cost| 406800|

C. Period Costs
Accounts name| Amount ($)|
Sales salaries| 12650|
Depn.. On delivery trucks | 3800|
Repairs to office equipment| 1300|
Advertising| 18000|
Office supplies used| 2640|
Total Period Costs| 38390|

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QUESTION 2

Answer

A. Costs of goods manufactured for December 2010
Detail| Amount| Amount|
Raw material inventory Dec. 1| $18,00| |
Raw material Purchases| $264,000| |
Raw material available for use| $282,000| |
Less: Raw material inventory Dec.31| $34,000| |
Direct Material Used| | $248,000|
Direct Labour Costs| | $190,000|
Manufacturing overhead| | |
Rent on factories facilities| $60,000| |
Dep. On factory equipments| $31,000| |
Indirect labour costs| $28,000| |
Utilities expenses (70% of 12000)| $8,400| |
Insurance expenses (60% of 8000)| $4,800| |
Total manufacturing costs overhead| | $132,200|
Total manufacturing costs| | |
Work in progress December 1| $16,000| |
Less: Work in progress December 31| $14,000| |
Costs of goods manufactured for December 2010| | $572,200|

B. Income Statement For December 2010
Details| Amount| Amount|
Sales (net)| | $780,000|
Less: Operating expenses| | |
Raw materials purchases| $264,000| |
Direct labour cost| $190,000| |
Advertising expenses| $90,000| |
Selling & Administration Salaries| $75,000| |
Rent on factory facilities| $60,000| |
Depreciation on sales equipment| $45,000| |
Depreciation on factory equipment| $31,000| |
Indirect labour costs| $28,000| |
Utilities expenses| $8,400| |
Insurance Expenses| $4,800| |
Selling & Administration activities (3600+3200)| $6,800| $803,000| Net Loss| | -$23,000|

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QUESTION 3

Answer

A. The overhead rate for each activity.

We know Estimated total costs/ Total numbers = Predetermined Overhead Rate Details| Estimated total costs/Total numbers| Overhead Rate| Materials Handlings: | 35000/1000| $35|
Machine Setup:| 27000/500 | $54|
Quality inspections:| 27000/600 | $45|

B. Manufacturing Overhead costs for April to the Two Products Using activity based costing.

Details| Instruments| Gauges|
Material Handlings 400*$35600*$35| $14000| $21000|...
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