Activity Solutions

Part 1 ANSWER
1. Metal used in manufacturing tables MO

2. Insurance on factory machines MO
3. Leather used in manufacturing furniture DM
4. Wages paid to machine operators DL
5. Depreciation of factory machinery MO
6. Salaries of factory supervisors MO
7. Wood used in manufacturing furniture DM
8. Sandpaper, bolts and nails MO
9. Property taxes on factory building MO
10. Rent on factory building MO
Part 2. ANSWER
1. Factory rent Fixed Cost
2. Wages for workers paid based on units produced Variable Cost
3. Equipment maintenance Mixed Cost
4. Cost of accountant’s salary Fixed Cost
5. Depreciation based on output Variable Cost
6. Salary of factory supervisor Fixed Cost
7. Telephone (monthly) Mixed Cost
8. Paper in manufacture of books Variable Cost
9. Wages of machine operators Variable Cost
10. Commission of salesmen Mixed Cost
Part 3. ANSWER
1. Metal for the manufacture of golf clubs Manufacturing
2. Wages of drivers of delivery trucks Manufacturing
3. Rent on factory building Manufacturing

4. Freight-in of materials purchased Selling
5. President’s salary Administrative
Part 4 ANSWER
1. Wood used in bookcases Variable Inventoriable
2. Machine depreciation based on machine hrs Variable Inventoriable
3. Fire insurance on factory equipment Fixed Inventoriable
4. Wirin used in radios Variable Inventoriable
5. Indirect materials Fixed Inventoriable
6. Sales commissions Variable Period
7. Bottles used to package liquid Variable Inventoriable
8. Gasoline for a delivery truck Fixed Inventoriable
9. Straight line depreciation of trucks used for
Fixed Inventoriable
delivery of sales to customers
10. Machine operators hourly wages. Variable Inventoriable
Problem 1
Month Volume in Machine Hrs. Electricity Cost
July 6,000 60,000
August 5,000 53,000
September 4,500 49,500
October 4,000 46,000
November 3,500 42,500
December 3,000 39,000
Total 26,000 290,000
Using the high-low method compute

1. Total variable cost per machine hour
2. Monthly fixed electricity costs
3. The total electricity if 4,800 machine hours are
projected to be used next month
Solution:
Highest cost- Lowest cost
1. Variable cost =
Highest volume- lowest volume
60,000-39,000
=
6,000-3,000
21,000
=
3,000
Variable cost= ₱7.00
First Option Secod Option

Total Highest Cost -
Total Lowest Cost - (Lowest
2. Fixed cost = (Highest volume X
volume X Variable cost)
Variable cost)
= 39,000-(3,000X 7) 60,000- (6,000*7)
Fixed cost = ₱18,000.00 ₱18,000.00
3. Total Cost if 4800= (Variable cost per unit X Machine hours ) + Fixed cost
= (4,800X7) + 18000
= ₱51,600.00
Problem 2
CanaLAng Statement of Cost of Good Sold Statement
For the Month May 31, 2019
Direct Materials used

Materials Inventory, MAy 1 124,000
Add: Purchases 142,800.00
Total Available for use 266,800.00
Less: Materials Invetory, MAy 31 150,000.00 116,800.00
Direct Labor 160,000.00
Factory Overhead 240,000.00
Total Manufacturing Cost 516,800.00
Add: Work in process, May 1 129,200
Cost of goods put into process 646,000.00
Less: Work in process, May 31 -124,000
Cost of goods manufactured 522,000.00
Add: Finished goods, May 1 150,000
Total Goods Available for Sale 672,000.00
Less: finished goods, May 31 122,000
Cost of Goods Sold 550,000
Problem 1
1. Compute the prime costs Prime cost is DL+ DM

DM= 65,000-15,000 50,000 1. Variable m
DL= 70,000-18,000 52,000
Prime cost 102,000
2. Compute the conversion cost Conversion is DL+ MO
DL= 70,000-18,000 52,000
MO= 95,000 95,000
Conversion cost 147,000 2. Variable c
3. Compute the total product cost Product cost is DM+DL+MO
DM 50,000
DL 52,000
MO 95,000
TOTAL PRODUCT COST 197,000
4. Compute the total period costs
General and administrative expenses 2,600 3. Full Manu
Office Salaries 18,600
TOTAL PRODUCT COST 21,200
5. If the selling price is P50.00, how much is the net income.
Sale( 4500*50) 225,000.00 4. Full cost p

Cost of Good Sold (197,000/5,000)* 4500 - 177,300.00
Gross Profit 47,700.00
Less: operating Expense - 21,200.00
Net In come 26,500.00
Problem 2
1. Variable manufacturing cost per unit

Manufacturing overhead 9.00
Direct Labor 30.00
Direct Materials 60.00
Total Variable Manufacturing 99.00
2. Variable cost per unit

Marketing and administrative 6.00
Manufacturing overhead 9.00
Direct Labor 30.00
Direct Materials 60.00
Total Variable Cost 105.00
3. Full Manufacturing cost per unit

Total Variable Manufacturing 99.00
Fixed Manufacturing per unit 25.00 *(30,000/1200)
Total Full Manufacturing Cost 124.00
4. Full cost per unit

Total Variable Cost 105.00
Total Fixed Cost 45.00 *(54,000/1200)
Total Full Cost 150.00
Problem 3
Direct Materials used

Materials Inventory, January 1 100,000.00
Add: Purchases 640,000.00
Total Available for use 740,000.00
Less: Materials Invetory, December 31 150,000.00 590,000.00
Direct Labor
Factory Overhead
Total Manufacturing Cost 790,000.00
Add: Work in process, January 1 97,000.00
Cost of goods put into process 887,000.00
Less: Work in process, December 31 - 87,000.00
Cost of goods manufactured 800,000.00
Add: Finished goods, January 1 80,000.00
Total Goods Available for Sale 880,000.00
Less: finished goods, December 31 - 130,000.00
Cost of Goods Sold 750,000.00

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Part 1 ANSWER

1. Metal used in manufacturing tables MO

2. Wages of drivers of delivery trucks Manufacturing

3. Rent on factory building Manufacturing

Using the high-low method compute

First Option Secod Option

Direct Materials used

1. Compute the prime costs Prime cost is DL+ DM

Sale( 4500*50) 225,000.00 4. Full cost p

1. Variable manufacturing cost per unit

2. Variable cost per unit

3. Full Manufacturing cost per unit

4. Full cost per unit

Direct Materials used

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