chapter 2_ cost concepts, information systems

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Cost Concepts, Information System

E-1

1- Identify the conversion cost per unitConversion cost =DL+FO= 20 + (15+6) = 41 /- units

!- Identify the prime cost"rime cost=D#+DL

= 32 + 20 = 52 /-units$- Determine the estimated tota% varia&%e cost per unit

= 32+20+15+3 = $70'- (ota% cost for production 1!,))) units*

(O(L COS( s .nit sDirect Material 32 × 12000 =384000Direct La!ur 20 × 12000 =240"000#ariale %& 15 × 12000 =180"000i'e %& 6 × 12000 =72000

$ 876"000

(ota% cost for sa%es /,))) units

Direct Material 32 × 8"000 = 256"000Direct La!ur 20 × 8"000 = 160"000

#ariale %& 15 × 8"000 = 120"000i'e %& 6 × 8"000 = 48"000#ariale *aretin, 3 ' 8"000 = 24"000i'e *aretin, 4 ' 8"000 = 32"000

$ 640"000

E-! Determine #erca%do Company0s epected operatin2income or %oss for 1345

134

ale ecease t! 15. s

usinessell!si !ri,ts Mr al*an 9!usa: 1



1;;50"000 × 15.

1;50"000 < 2;;2500 16;57500

Less

i'e c!st 7623000

#ariale c!st (>) ;835350 1745835

6et %oss 78))/8)9

:aria&%e cost varies ;ith sa%es

:C Sa%es

1;? 11571000 1;50"000

1; ' 16;57500

1;50"000 ' = (1157100) (16;5750)

' = ;835350

E- $*

Croc<ett Company

Cost Of oods So%d Statement

For (he >ear Ended On Dec , $14




s s sDirect Material

Material %enin, 176000

? urcases (@et) 2400"000 ? rei,t in 32000 2432000

Material aAailale :!r use 2608000

Less Material Bnin, 1;6000

Direct Material use2412000

Direct La!r3204000

act!r %Aerea188560%

C!tal current *anu:acturin, c!st7501600

? >!r - in < r!cess !enin,12;800

!st !: ,!!s aAailale :!r *anu:acturin,7631400

Less >!r - in < r!cess enin,136800

!st !: ,!!s *anu:acture74;4600

? inise ,!!s !enin,

620"000

!st !: ,!!s aAailale :!r sale 8114600




Less inise ,!!s enin,567400 !st !: ,!!s s!l

7547200

E- ' "repare ?ourna% entries for a&ove transactions5

@O.6L s s

1->!r - in < r!cess ?/ 24500act!r !Aerea ?/ 4500

Material ?/ 2;000AAAAAAAAAAAAAAAAAAAAAAAAAAAAA

!-ar!ll ?/ 44000 ?ccrue ar!ll ?/ 33700 Enc!*e ta' itel 7000 E? ta' at 75. 33000

?ccrue ar!ll ?/ 33700 as ?/ 33700

AAAAAAAAAAAAAAAAAAAAAAAAAAA$->!r- in < r!cess 30"000%& 6000Maretin, e'enses 8000

ar!ll ?/ 44000act!r !Aerea ?/ 4;32Maretin, e'enses 10;6

Fne*l!*ent Ensurance 2376 eral une*l!*ent 352 E? Ca' /? 3500

Bor<in2 C!tal c!st =2376+352+3500 =6028%& (irect G inirect la!ur)

=6028+36000/44000 =4;32Maretin, e'enses

=6028×8000/44000=10;6

'-act!r !Aerea 7500#!ucer aale 7500AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

8->!r - in < r!cess 22;32




act!r !Aerea alie 22;32AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

-inise ,!!s 60"000>!r - in < r!cess 60"000

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA-Material 50"000#!ucer /? 50"000AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

/-!st !: ,!!s s!l 20"000inise ,!!s 20"000

?/ HeceiAale 26000

ales 26000

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

E - 8 Dr

Cr




Date "articu%ars

7a9 Material ?/

?cc!unt aale ?/

120"000

120"000

7&9 ar!ll ?/

E? Ca'

Enc!*e Ca'

?ccrue ar!ll>!r in r!cess ?/

act!r !Aerea ?/

Maretin, e'enses ?/

?*inistratiAe e'enses ?/

ar!ll ?/

;0"000

45"000

;"000

15"000

21"000

6750

15750

675000

;0"000

7c9 Material ?/

?cc!unt aale ?/

26250

26250




7d9 act!r !Aerea

Maretin, e'enses ?/


tate une*l!*ent

eeral une*l!*ent

E?? Ca'

6156

1710

23;4

27;0

720

6750

7;or<in29

C!tal c!st = 10260

>E = 10260×(54000)/;0"000

=6156

Mar B' = 10260×(15000)/;0"000

=1710

?*in e' = 1026×(21000)/;0"000

=23;4

7e9 >!r in r!cess ?/

act!r !Aerea ?/

Maretin, e'enses ?/

Material ?/

60"000

15"000

4"5007;500

7f9 ?cc!unt aale ?/

Material ?/

;00

;00




729 ?cc!unt aale ?/

?ccrue ar!ll ?/

as ?/

75000

67500

142500

7h9 act!r !Aerea ?/

?ccu*ulate De-

Maciner

1000

1000

7i9 act!r !Aerea ?/

?cc!unt aale ?/

;600

;600

7?9 inise ,!!s ?/

>!r in r!cess ?/

126000

126000

7<9 !st !: ,!!s s!l ?/

inise ,!!s ?/

?cc!unt receiAale ?/

ales ?/

;6000

150"000

;6000

150"00

0

7%9 act!r !Aer ea ?/

?cc!unt aale ?/

38056

38056




E -

Dr Cr

Date "articu%ars

7a9 >!r in r!cess ?/

act!r !Aerea ?/

Material ?/

18500

2800

21300

7&9 inise ,!!s ?/

>!r in r!cess ?/

51000

51000

7c9 Material ?/

?cc!unt aale ?/

32000

32000

7d9 ar!ll ?/

E? Ca'

eeral Enc!*e Ca'

tate Enc!*e Ca'

?ccrue ar!ll

50"000

3750

8750

2500

35000

7;or<in29

Let t!tal ar!ll = 100

?ccrue ar!ll = 100- 75- 175-5

=70.?ccrue ar!ll ?/

as ?/

35"000

35000

7e9 >!r in r!cess ?/ 27500

usinessell!si !ri,ts Mr al*an 9!usa: ;



act!r !Aer ea ?/

Maretin, e'enses ?/


ar!ll ?/

;000

8500

5"000

50"000

7f9 act!r !Aer ea ?/

Maretin, e'enses ?/


E? ?/

eeralune*l!*ent ta'

tate

une*l!*ent ta'

5000

1165

685

3750

400

2700

7;or<in29

C!tal = 6850

-%-& = 6850×36500/50"000

=5"000

Maretin, e' = 6850×8500/50"000

= 1165

?*in e' = 6850×5"000/50"000

= 685




729 act!r !Aerea ?/

?ccu*ulate De-

BIuit

reai insurance

?cc!unt aale ?/

11300

;450

600

1250

7h9 >!r in r!cess ?/

act!r !Aer alie

281005

02810050

7i9 ?cc!unt receiAale ?/

ales ?/

;2120

;2120

7?9 !st !: ,!!s s!l ?/

(;2120×100/140)inise ,!!s ?/

as ?/

?cc!unt receiAale

?/

65800

76000

65800

76000




E -

(uornton Company

Cost of 2oods manufactured statementFor the month of Octo&er, 13

Direct #ateria%

%enin, EnAent!r

+urcases

!st !: *aterial aAailale

- cl!sin, EnAent!r

!st !: *aterial use

?

Direct la!ur

"rime cost

? act!r !Aerea

Current manufacturin2 cost

? >!r in r!cess

7openin2 Inventory9

Less l!sin, inAent!r

!st !: ,!!s *anu:acture

16200

2;"000

36200

17000

1;200

16500

35700

8580

44280

3600

47880

7120

40760

E - /




"ensaco%a Corporation

Cost 2oods so%d statement

For the year ended5 Direct materia%

%enin, inAent!r

+ @et urcases

+Direct e'enses

!st !: *aterial aAailale

-cl!sin, inAent!r

!st !: *aterial use

Direct %a&our

+ri*e c!st

Factory overhead

+De Manu:acturin,

urrent Manu:acturin, c!st

Bor< in process

+%enin, inAent!r

!st !: ,!!s t! e *anu:acture

-cl!sin, inAent!r


Finished 2oods

88"000

366"000

6"600

460"600

64"000

3;6600

523600

;20200

572800

14;300

2;800

152280038800

1484000




+!enin, inAent!r

!st !: ,!!s aAailale :!r sale

-cl!sin, inAent!r

!st !: ,!!s s!l

54200

1538200

66000

1472200

" - 1

#at5Company

Cost of 2oods manufactured statement




For the month of #arch,

Direct #ateria%

%enin, inAent!r

+urcases

!st !: *aterial aAailale :!r use

-cl!sin, *aterial use

Direct *aterial use

Direct La&our*

+Direct La!ur c!st

ri*e c!st

Factory overhead*

+-%-& c!st

urrent *anu:acturin, c!st

Bor< in process*

+%enin, inAent!r


-cl!sin, inAent!r


Finished 2ood*

+%enin, inAent!r


20"000110"000

130"000

26"000

104"000

160"000

264"000

80"000

344"000

40"000

384"000

36"000

348"000

102"000




-cl!sin, inAent!r

!st !: ,!!s s!l

450"000

105"000

345000

(>!rin,)

F-O- = 50. !: irect la!ur

= irect la!ur×50/100

Current manufacturin2 cost = D5#+D5L+F-O-

344"000 = 104"000+ ' +(' × 50/1000)

344"000 < 104"000 = ' + 50'/100

240"000 = 100' + 50'/100

240"000 × 100/150 = '

160"000 = '

7a9 cost of 2oods manufactured = 348"0007&9 prime cost = 264"0007c9 conversion cost = %a&our + F-O-

= 160"000 + 80"000 = 240"000

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA




" - !

Company G

!st !: ,!!s *anu:acture 380000

Finished 2oods*

+!enin, inAent!r 600"000


4400"000

-cl!sin, inAent!r

1200"000

!st !: ,!!s s!l

3200"000

7Bor<in29

Cost of 2oods so%d = sa%e A 5"

= 4000"000 (4000"000 20/100)

= 320"000

Company-4


14;0"000

Less inise ,!!s cl!sin,

1;0"000

!st !: ,!!s s!l 13"00"000




" G ! 7cont59

Company-C

ales 42;"000

Less c!st !: ,!!s s!l 333"000

r!ss r!Jt ;6"000

7Bor<in29


340"000

+inise ,!!s !enin,

45"000


385"000

inise ,!!s cl!sin,

52"000

!st !: ,!!s s!l

333"000

" - $

eH719

#ateria% C




al /

20"000

?/

65"000

85"000

>-E-(al)

70"000

al c/15"000

85"000

Material issue t! r!ucti!n = 70"000

eH7!9

"ayro%% C

?ccrue ar!ll

6000

6000

>-E-

6000

6000

Direct la!ur c!st = 6000

eH7$9 F-O- C

ulies e'?/

20000

En la e' ?/

55000

?cc De10000

re Ens

2000

Misc e'

>-E- (al)

100"000

100"000

usinessell!si !ri,ts Mr al*an 9!usa: 1;



13000

100"000

C!tal -%-& = 100"000

eH7'9

B-I-" C

al/

7000

Material

70000

ar!ll(la)

6000

-%-&

100"000

183000

in ,!!s

172"000

alc/

11000

183000

!st !: ,!!s *anu:acture = 172000

eH789

Finished 2oods C

al/

34000>-E-

172000

176000

alc/

30"000




206"000

206"000

!st !: ,!!s s!l = 176000

eH79

" C

as

77000

al c/

6000

83000

al/

18000

Material

65000

83000

a*ent !: ?/ = 77000

eH79

C

al/

54000

ales

500"000

554000

as

532000

alc/

22000

554000

?*!unt c!llecte :r!* acc!unt receiAale =

548000

eH7/9




ccrued payro%% C

as

10"000

alc/

;000

1;000

al/

13000

a*ent ?/6000

1;000

a*ent t! ?/ = 10"000

" - '

Bater Lu Company

1- For "urchase Of #ateria%Material ?/

;1"000

?cc!unt aale ?/;1"000

!- For .se Of #ateria%

>!r in r!cess

84"000 Material ?/

84"000

$- For Direct La&our>!r in r!cess

50"000 ar!ll ?/

50"000




'- For Factory Overheadact!r !Aerea ?/

25"000 ?cc!unt aale ?/

25"000

8- For Finished oodsinise ,!!s ?/

157"000 >!r in r!cess ?/

157"000

- For Cost Of oods So%d

!st !: ,!!s s!l140"000 inise !!s

140"000 AAAAAAAAAAAAAAAAAAAAAAAAAAAAA" G ' 7Bor<in29 Ca%cu%ation of purchase, use of materia%, direct %a&our,

FO, Finished 2oods, cost of 2oods so%d5Direct #ateria%

%enin, inAent!r17000+urcases

;1"000!st !: *aterial aAail ale

108"000 cl!sin, inAent!r

24"000!st !: *aterial use

84"000Direct La&our+Direct la!ur c!st

50"000ri*e c!st

134000




Factory overhead+%&

25000urrent Material c!st

150"000B"+ %enin, inAent!r

12000!st !: ,!!s t! e *anu:acture 1"

71"000 l!sin, inAent!r

141000!st !: ,!!s *anu:acture 1"

57"000Finished oods+!enin, inAent!r

2;"000!st !: ,!!s aAailale :!r sale

185"000 cl!sin, inAent!r

45"000!st !: ,!!s s!l

140"000AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

" - 8

"repare ( accounts ;ith @anuary 1 4a%ance51- Cash C




al /

20"000

?/ ?/

17;37;

1;;37;

?ccrue ar!ll

74820

?/ ?/

104000al c/

2055;

1;;37;

!- C ccount ec

al /

25000ales ?/

228800

253800

as ?/

17;37;Disc!unt ?/

3661al c/

70760

253800

$- Finished oods

al /

;500>/

188000

1;7500

176000

al c/

21500

1;7500

'-




B" C

al /

45000ar!ll

60500Material

82500%& alie

47330

1;4830

,!!s

188000

alc/

6830

1;4830

8- " C

as

104000

al c/

160000

264000

al /

15500Material

;2000%& ?/

18500

Mar e'18000?*in e'

120000

264000

- #ateria% C




al /

10"000 ?/ ?/

;2000

102000

>/

82500%&

8300

al c/

11200

102000

-

ccrued payro%% C

as

74820

al c/

2250

77070

al /

2250

ar!ll74820

77070

/-

#achinery C

al /

40"000al c/




40"000

40"000

40"000

3-

Depreciation C

al c/

10"000

10"000

al /

10"000

10"000

1)-

Common stoc<

al c/

60"000

60"000

al /

60"000

60"000

11-

etained Earnin2s




al c/

21250

21250

al /

21250

21250

1!-

Bith o%din2

al c/8170

8170

ar!ll ?/

8170

8170

1$-

State unemp%oyment

al c/

2322

2322

ar!ll

2322

2322

1'-

FO




?/ ?/

18500

ar!ll

12500E? Ca'

5475

Material

8300

44775

al c/

44775

44775

18-

#ar<etin2 ep

ar!ll

8000

E? ta'

600

?/ ?/

18000

26600

al c/26600

26600




1-

dmin ep C

ar!ll

5000

E? Ca'

375

?/ ?/

120"000

125375

al c/

125375

125375

1-

FIC (a

al c/

6450

6450

%&

5475

Mar e'600

?*in e'

375

6450

1/-

FO pp%ied

al c/

>/

47330




47330

47330

47330

13-

C55S

176000

176000

al c/

176000

176000

!)-

Sa%es C

al c/

228800

228800

?/ ?/H

228800

228800

!1-

Discount C




?/H ?/

3661

3661

al c/

3661

3661

!!-

"ayro%% C

>&Ca'

8170

tate une* ta'

2322

eeral une* ta'

688

?ccrue ar!ll

74820

86000

>/

60500

%&

12500

Mar e'

8000

?*in e'

5000

86000




" G 8 7cont59

(IL 4L6CE

SJ

C (I(LE Dr Cr




1-

2-

3-

4-

5-

6-

7-

8-

;-

10

-

11

-

12

-13

-

14

-

as

?/H ?/

?/

>/ ?/

?/ ?/

Material ?/

?ccrue ar!ll ?/

Maciner ?/

?/ Dereciati!n ?/

!**!n st!c

HB ?/

>B Ca' ?/

tate une* ta'

eral une* ta'

2055;

70760

21500

6830

11200

40"000

160"000

2250

10"000

60"000

21250

8170

2322

688




15

-

16

-17

-

18

-

1;

-

20

-

21

-

22

-

23-

Maretin, e'

?*in e'

E? Ca'

%& ?lie ?/

ales ?/

Disc!unt ?/

ar!ll ?/

%& ?/

26600

125375

176000

3661

44775

6450

47330

28800

8'!) 8'!)




"- 8 7cont59

@O.6L E6(IES

5Material ?/ ?/ ?/

s

;3"000

s

;3"000

45%& ?/ ?/ ?/

18500

18500

C5 ar!ll ?/>it !lin, ta'

tate un e*l!*ent ta'

eeral un e*l!*ent ta'

?ccrue ar!ll

86000

8170

2322

688

74820

?ccrue ar!ll as

74820

74820




>/ ?/

%& ?/

Maretin, e'ensesar!ll ?/

60500

12500

8000

86000

%& ?/

Maretin, e'enses E? Ca'

5475

600

6450

D5>!r in r!cess ?/

%& ?/ Material

82500

8300

;0800

E5 >/ ?/%& ?lie ?/

47330

47330

F5 inise ,!!s

>/ ?/

188000

188000

5!st !: ,!!s s!l

inise ,!!s

176000

176000

?/H ?/

ales ?/

228800

228800

5as ?/

Disc!unt ?/ (183040×2.) ?/H ?/ (228800×80.)

17;37;

3661

183040




I5 Maretin, e'enses

?*in e'enses ?/ ?/

18000

120"000

300"000

@5 ?/ ?/ as ?/

104000

104000

" -

#6D#E6E>E CO#"6>

COS( OF OODS SOLD S((E#E6(

FO (E >E4 E6DED O6 $)-11-134

Direct #ateria%

%enin, inAent!r 4000

+urcases 1" 80"000

!st !: *aterial aAailale 22"000

cl!sin, inAent!r 4250

Direct *aterial use

17750

Direct La&our

+Direct la!ur

7500

ri*e c!st

225250

FO




+%& ?lie

5000

urrent *anu:acturin, c!st

30250BI"

+%enin, inAent!r

4000


34250

l!sin, inAent!r7500


26750

Finished oods

+%enin, inAent!r

3500


30250

cl!sin, inAent!r

5700

!st !: ,!!s s!l

25150




" - 7cont59

#6D#E>E CO#"6>

I6CO#E S((E#E6(FO (E >E E6DED $)-11-134

s s

@et sales

56000

Less* c!st !: ,!!s s!l725150)

ross "roKt

$)/8)

Less* Openin2 epenses




Maretin, e'enses 2800

56000×2.

?*inistrati!n e'enses 1120

(3;20)

56000×2.

Operatin2 Income

!,3$)

Less* %ter e'enses

(560)

56000 ×1.

6E( I6CO#E

!,$)

AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA

A

chapter 2_ cost concepts, information systems

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