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Cost classification: Classify the following as direct materials (DM), direct labor (DL), factory overhead (FOH), administrative

(AD) and selling (SE) expense by putting a check on the appropriate column.

DM DL FOH AD SE
1. Wages of company officials other the plant supervisor.
2. Wages of finished goods inventory warehouse man.
3. Transportation and representation allowance plant managers and
Supervisors.
4. Transportation and representation allowance of sales managers.
5. Wood glue and other related adhesives used by furniture factories.
6. Buttons, threads and zippers used by ready to wear manufacturing
Company.
7. Lubricating oil used by factories in their operations.
8. Gas and oil used by the company president.
9. Electric and power consumption of the administrative office.
10. Electric and power consumption of factory companies.
11. Depreciation of delivery truck of a manufacturing company
Used in delivering finished goods to customers.
12. Cloth used by a ready to wear factory.
13. Cost of daily advertisements in local newspaper regarding new
Product line.
14. Cost of renting a private helicopter to fly along the grandstand
Pulling a banner advertising a new product.
15. Cost of dishes broken by restaurant servers.

Cost classification: classify each cost as product cost or period cost by putting a check mark on the appropriate column. If an
item is not appropriate to be product or period cost, write N/A to both columns.

Product Cost Period Cost


1. Depreciation of plant and machineries.
2. Depreciation of service vehicles used by sales managers.
3. Depreciation of office machineries and equipment.
4. Paper and toner used for the office copier machine.
5. Bond paper used by a legal office.
6. Paper and plastic bags used by supermarkets.
7. Bonuses paid to factory workers for an efficient performance.
8. Transportation cost of goods delivered to customers.
9. Cost of medical supplies for the emergency ward of a hospital.
10. Transportation expenses of a production manager in attending skills
Training workshop.
11. Costs of good served to a valued client of a company.
12. Gas and oil consumed by plant machineries.
13. Cost of newspaper ads for the announcement of a new office location.
14. Salaries, compensations and other benefits paid to the Human
Resource Manager.
Separating Mixed Cost
Machine hours and electricity costs for Hernani Industries for 2018 were as follows:
Month Machine Hours Utility Costs
January 2,500 P 36,800
February 2,900 42,000
March 1,900 27,000
April 3,100 46,000
May 3,800 56,500
June 3,300 44,000
July 4,100 49,500
August 3,500 45,500
September 2,000 31,000
October 3,700 52,000
November 4,700 62,000
December 4,200 55,500

How much is the variable cost per unit?


a. P12.5 per unit. b. P15 per unit. c. P12.5 per machine hour. d. P15 per machine hour.

How much is the fixed cost?


a. P3,250 b. P2,350 c. P5,350 d. P5,230

Using the High-Low method, the estimated utility cost at 2,500 machine hours is: ________

The following information was available about supplies cost for the first four months of the year:

Month Production Supplies Cost


January 2,800 P 9,500
February 6,400 28,400
March 2,400 10,800
April 6,300 30,100
Using high-low method, the estimated supplies cost at 5,000 units of production is:
a. P44,000 b.P44,240 c. P22,240 d. P44,640

The following information has taken from the cost records of T Co. for the past year:
Raw materials used in the production P 326,000
Prime Costs for the period 551,000
Conversion cost for the period 360,000
(OH applied is equal to 60% of direct labor)
Cost of goods available for sale 826,000
Selling and administrative expenses 25,000
Inventories Beginning Ending
Raw materials P 75,000 P 85,000
Work in Process 80,000 30,000
Finished Goods 90,000 110,000

The cost of raw material purchased amounted to:


a. P316,000 b. P336,000 c. P360,000 d. P411,000
The total factory cost for the period amount to:
a. P911,000 b. P551,000 c. P686,000 d. P767,000

If mark up is 20% based on sales, how much be the sales?


a. P895,000 b. P859,200 c. P800,100 d. P716,000

If mark up is 20% based on cost, how much is the net income?


a. P154,000 b. P118,200 c. P143,200 d. P116,200

The following data are available about the X Company:


2016 2017 2018
Beginning Materials Inventory P 100,000 ? P 120,000
Ending Materials Inventory 150,000 ? 110,000
Beginning Work in Process Inventory 300,000 ? 180,000
Ending Work In Process Inventory 240,000 ? 210,000
Direct labor P 200,000
Manufacturing Overhead 400,000
Materials Purchases 300,000

The cost of goods manufactured in 2017 is:


a. P900,000 b. P930,000 c. P990,000 d. P980,000