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:
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Revenue
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$450,000
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Beginning inventory of direct materials, January 1, 2015
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20,000
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Purchases of direct materials
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156,000
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Ending inventory of direct materials, December 31, 2015
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18,000
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Direct manufacturing labor
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21,000
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Indirect manufacturing costs (factory overhead)
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42,000
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Beginning work-in-process January 1, 2015
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38,000
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Ending work-in-process December 31, 2015
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62,000
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Beginning inventory of finished goods, January 1, 2015
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40,000
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Ending inventory of finished goods, December 31, 2015
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45,000
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Operating costs
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150,000
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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:
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Choice
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Demand in units
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Unit Selling Price
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1
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18,000
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$11
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|
2
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15,000
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$12
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3
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11,000
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$13
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4
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8,000
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$14
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Required: What price should be set for the product?
6. Consider the following information:
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Units made
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1,200
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Units sold
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950
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Variable manufacturing costs per unit
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$ 45
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Variable selling costs per unit
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$ 30
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Fixed manufacturing costs per unit
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$ 25
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Fixed selling costs
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$ 25,000
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Beginning inventory (in units)
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0
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Ending inventory (in units)
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400
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Unit selling price
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$200
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Prepare a variable costing and absorption costing income statement.