Reference no: EM13828303

COST ACCOUNTING 

NOTE: Be sure to show all your detailed calculations. This has the possibility of partial credit for the exercises. There isn't any partial credit for the questions. 

I. Questions 

1.  What are the three types of management decisions? 

2.  Which type of management decision involves the cost volume profit analysis? 

3.  What type(s) of cost are included under conversion cost and prime cost? 

4.  Provide two examples of committed fixed cost and two examples of discretionary fixed cost. 

5.  Define segment reporting and provide two examples of segments. 

II. Exercises

1. Leslie Manufacturing reported the following: 

Revenue	$450,000
Beginning inventory of direct materials, January 1, 2015	20,000
Purchases of direct materials	156,000
Ending inventory of direct materials, December 31, 2015	18,000
Direct manufacturing labor	21,000
Indirect manufacturing costs (factory overhead)	42,000
Beginning work-in-process January 1, 2015	38,000
Ending work-in-process December 31, 2015	62,000
Beginning inventory of finished goods, January 1, 2015	40,000
Ending inventory of finished goods, December 31, 2015	45,000
Operating costs	150,000

  

Required:

 1) What is Leslie's cost of goods cost of goods manfactured? 

2) What is Leslie's cost of goods sold? 

3) What is Leslie's gross profit (or gross margin)?

2. The following information is provided for Samsonite Manufacturing Company for 2015: 

      Ending finished goods, 12/31/15         $5,500,000

      Raw material purchases during 2015         mce_markernbsp; 650,000

Accounts payable 1/31/15                   $1,810,000

Beginning raw materials inventory 1/1/15   mce_markernbsp; 725,000

Cost of goods manufactured                 $3,250,000

      Cost of goods sold                         $2,750,000

      Ending raw materials inventory 1/31/15        500,000 

Required: 

Determine the beginning finished good at 1/1/15?

3. The Holiday Card Company, a producer of specialty cards, has asked you to complete their breakeven point (number of cards) based upon the following information: 

            Income tax rate            30%

            Selling price per unit   $6.60

            Variable cost per unit   $5.28

            Total fixed costs   $46,200.00 

Required: 

How many cards must be sold to earn an after-tax net income of $18,480?

4. Given the following information determine the unit variable cost: 

• Unit selling price $200
• Fixed cost $100,000
• Operating income $40,000
• Number of units required 1,000

5. A company has annual fixed cost of $20,000 which is not affected by different volumes of units sold. Variable cost per unit is $10. The company estimates that its product demand under different level of demand amounts in units is as follows at various unit selling prices: 

Choice	Demand in units	Unit Selling Price
1	18,000	$11
2	15,000	$12
3	11,000	$13
4	8,000	$14

  

Required: What price should be set for the product? 

6. Consider the following information: 

Units made	1,200
Units sold	950
Variable manufacturing costs per unit	$ 45
Variable selling costs per unit	$ 30
Fixed manufacturing costs per unit	$ 25
Fixed selling costs	$ 25,000
Beginning inventory (in units)	0
Ending inventory (in units)	400
Unit selling price	$200

Prepare a variable costing and absorption costing income statement.