Chapter 1 – Cost Concepts, Classifications and Accounting Cycle Summary of Answers Exercise 1-1 1. 2. 3. 4. !. ". #. $. %. 1&.
Administrative Ex Expense Factory Overhead Factory Overhead Direct Laor Factory Overhead Selling Expenses Factory Overhead Factory Overhead Factory Overhead Selling Expenses
11. 12. 13. 14. 1!. 1". 1#. 1$. 1%. 2&.
Selling Ex Expenses Selling Expenses Factory Overhead Selling Expenses Factory Overhead Selling Expenses Selling Expenses Factory Overhead Selling Expenses Administrative Expenses
Exercise 1-2 1. 'rod(ct)Service *osts 2. 'rod(ct)Service *osts 3. 'eriod *osts 4. 'eriod *osts !. 'eriod *osts ". 'eriod *osts #. 'rod(ct)Service *osts $. 'eriod *osts %. 'r 'rod(ct) ct)Servic vice *o *osts 1&. 'eriod *osts
11. 'rod(ct)Service *osts 12. 'rod(ct)Service *osts 13. 'rod(ct)Service *osts 14. 'rod(ct)Service *osts 1!. 'eriod *osts 1". 'rod(ct)Service *osts 1#. 'eriod *osts 1$. 'rod(ct)Service *osts 1%. 'r 'rod(ct)Service *o *osts 2&. +)A
Exercise 1-3 1. h,a-a 2. '&.12! 3. /ighest0 3# 3#!& 4. 1!&&&
Loest0 1!&&
Exercise 1- 1. a ' 3!2$2& d. ' 314#11 . 1. ' 14&&&& e. ' 4#2&"# 2. ' 1132&! ,. ' 1!#3!" 3. ' $4%&4 c. ' 33%"1!
21. 'rod(ct)Service *osts 22. +)A 23. +)A 24. 'rod(ct)Service *osts 2!. +)A
2. o(rnal Entries a. a 5aterials Acco(nts 'ayale
24&&&&
. 6or in 'rocess 5an(,act(ring Overhead a 5aterials
1"$&&& 12&&&
c. Factory 'ayroll Accr(ed 'ayroll
1!&&&&
6or in 'rocess 5an(,act(ring Overhead 6or in 'rocess
12&&&& 3&&&&
24&&&&
1$&&&&
1!&&&&
1!&&&&
d. 5an(,act(ring Overhead Acc(m(lated Depreciation
12&&& 12&&&
e. 5an(,act(ring Overhead 7axes 'ayale
1!&&
,. 5an(,act(ring Overhead 'repaid 8ns(rance
432&
5an(,act(ring Overhead 9tilities 'ayale
! &&&
1!&&
432&
!&&&
2. :Financial Statement; Exercise 1-! a. . c. d. e. ,. g. h. i.
Exercise 1-"
' $" !&& a. '"&& &&& ' 12 !&& . ' 2!2 &&& '# !&& c. ' "$2 &&& '$& !&& d. '1%& %"& '24 !&& '11 &&&Exercise 1-& ". < '!! &&& :elo 7ale 1.3; '1! &&& '14$ !&&
#est $aterial 1%1 $ultiple Choice #heories 1. < 2. < 3. * 4. * ! A
11. D 12. D 13. * 14. D 1!. A 1". D
#. < $. < %. <
21. * 22. D 23. * 24. D 2!. A 2". *
1#. * 1$. * 1% .D 1&. *
2#. D 2$. A 2%. * 2&. D
3&. D
Exercise 1-& :7ale 1.3; 'tem (um)er 1. 2. 3. 4. !. ". #. $. %. 1&. 11. 12. 13. 14. 1!. Other *ategory 1". Other *ategory 1#. Other *ategory 1$. 1%. 2&. #otal
*irect $aterials ' !& &&& 2& &&&
7r(e 7r(e False False False 7r(e False False False False
11. ' %3&&&& 12. ' 12#&&& 13. ' 4!&& 14. ' $$!&& 1! ' #42!&&
.eriod Cost
' 2 !&& ' 1! &&& ! &&& 1 2&& 2$ &&& 2 $&& $ !&& 3 !&& % &&& $&& 2 4&&
! &&&
. 1/3 ///
1 !&& # !&& . 3& !//
. 1! /// #est $aterial 1-3
11. False 12. 7r(e 13. False 14. 7r(e 1!. 7r(e 1". False 1#. False 1$. False 1%. 7r(e 2&. False
1. 2. 3. 4. !.
$anufacturing
' 1& &&&
#est $aterial 1-2 1. 2. 3. 4. !. ". #. $. %. 1&.
*irect +a)or
1. Direct 5aterial 2. Direct 5aterial 3. Factory Overhead 4. 'eriod *osts !. Direct Laor ". 'eriod *osts #. 'eriod *osts $. Direct 5aterial %. Factory Overhead 1&. 'eriod *osts
#est $aterial 1-! * 11. A D 12. D D 13. * * 14. * A 1!. <
11. Factory Overhead 12. Factory Overhead 13. Factory Overhead 14. Factory Overhead 1!. 'eriod *osts
#est $aterial 1-" 1. * 11. < 12. * 2. A 13. A 3. < 14. < 4. < 1!. A !. *
. 1& 2// #est $aterial 1- 1. '2 2. '1%1#1.$4 3. '3432&&& 4. '"&&&& !. '%&&& ". '12&&& #. '21!&&& $. '4#!&&& %. '311&&&& 1&. '34!&&&&
21. < 22. * 23. D 24. *
1". ' 1&4%&&& 1#. ' 11&$!&& 1$. ' 1!"2&& 1%. ' 41#&& 2&. ' 3432&&&
". #. $. %. 1&.
A < < * A
1". 1#. 1$. 1%. 2&.
D < < A *
". < #. D $. < %. < 1&.A
1". * 1#. < 1$. < 1% < 2&.<
============================================================================== C$.0#A#'(S Exercise 1-1 Ex 1>1. *ost classi,ication. *lassi,y the ,olloing as direct materials :D5; direct laor :DL; ,actory overhead :FO/; administrative :AD; and selling :SE; expenses y p(tting a chec on the appropriate col(mn.
D5
DL
FO/
1
6ages o, company o,,icials other the plant s(pervisor.
2
6ages o, ra material inventory cler.
?
3
6ages o, ,inished goods inventory cler.
?
4 ! " # $ %
6ages o, ironorer in a constr(ction company. 7ransportation and representation alloance o, plant managers and s(pervisors. 7ransportation and representation alloance o, sales managers. 6ood gl(e and other related adhesives (sed y ,(rnit(re ,actories. <(ttons threads and @ippers (sed y ready to ear man(,act(ring company. L(ricating oil (sed y ,actories in their operations.
AD ?
? ? ?
? ?
as and oil (sed y the company president.
?
11
as and oil (sed y tr(cing company. Electric and poer cons(mption o, the administrative o,,ice. Electric and poer cons(mption o, ,actory companies. Depreciation o, delivery tr(c o, a man(,act(ring company (sed (n delivering ,inished goods to c(stomers.
?
13
14
?
1&
12
SE
? ?
?
1!
1%
*loth (sed y a ready to ear ,actory. *loth (sed y advertising companies in maing illoards. *ost o, daily advertisements in local nespaper regarding ne prod(ct line. Overtime pay o, the employee ho repairs the companyBs copier. *ost o, renting a private helicopter to ,ly along the grandstand p(lling a anner advertising a ne prod(ct.
2&
*ost o, dishes roen y resta(rant servers.
1" 1# 1$
? ?
? ?
?
?
Ex 1-2 *ost *lassi,ication. *lassi,y each cost as prod(ct cost or period cost y p(tting a chec mar on the appropriate col(mn. 8, the item is not appropriate to e the prod(ct or period costs rite +)A to oth col(mns.
'rod(ct *ost 1
'eriod *ost
?
2
Depreciation o, plant and machineries. Depreciation o, sports eC(ipment (sed y sports and ,itness center.
3
Depreciation o, delivery eC(ipment o, trading companies.
?
4
Depreciation o, service vehicle (sed y sales person.
!
Depreciation o, o,,ice eC(ipments.
"
'aper and toner (sed ,or o,,ice copier machine.
?
#
'aper (sed y printing company.
?
$
'aper and plastic ags (sed y s(permarets.
?
%
1&
7ransportation costs o, goods delivered to c(stomers.
11
7ransportation costs o, goods p(rchased ,rom s(ppliers.
12
*ost o, medical s(pplies o, a hospital.
?
? ?
? ? ? ?
1!
*ost o, contin(ing ed(cation o, a resident physician in a hospital. 7ransportation expenses o, a resident doctor in attending seminar aroad. *osts o, goods served to the visitors o, the company president.
1"
*osts o, ,ood served y resta(rant oners to their c(stomers
1#
as and oil cons(med y sales manager.
1$
as and oil cons(med y plant machineries
?
1%
as and oil cons(med y tr(cing companies.
?
13 14
2& 21 22 23 24 2!
?
?
?
? ?
as and oil cons(med y the company president. *ost o, ins(rance intended ,or the orers o, a constr(ction company. *ost o, nespaper ads to the anno(ncement o, ne o,,ice location. Salaries and compensation and other ene,its paid to /(man eso(rce 5anager. Salaries and compensations and other ene,its paid to orers o, a ,actory. 5aintenance costs ,or the ,amily vehicle o, the company exec(tive o,,icer.
? ?
?
?
?
?
Ex 1-3 /igh>Lo 5ethod. Dag(pan 7rans 8nc. has inc(rred the ,olloing (s maintenance costs d(ring the past six months. 5iles 7ravelled
5aintenance
*osts an(ary
12#!&
1#1&&
Fer(ary
1!%&&
1#4&&
5arch
1%&!&
1#!!&
April
22!&&
1$&&&
5ay
3&&&&
1$#!&
(ne
12&&&
1"!&&
eC(ired0 9sing high>lo method to separate mixed cost estimate the total ,ixed costs component o, the maintenance costs. /ighest Loest Di,,erence
5achine *ost 1$#!& >1"!&& 22!&
5iles 7raveled 3&&&& 12&&& 1$&&&
2. ariale *ost per 9nit0 22!& ) 1$&&& &.12! 3. *omp(te ariale *ost at /ighest and Loest Level o, Activity /ighest Level Loest Level
3&&&& &.12! 3#!& 12&&& &.12! 1!&&
4. Determining Fixed *ost at each level o, activity /ighest Level Loest Level
1$#!& > 3#!& 1!&&& 1"!&& > 1!&& 1!&&&
Ex 1- Act(al *osting 5ethod D(ring the month o, (ly the ,olloing transactions ere completed and reported y <(les 5an(,act(ring *ompany. a. a materials p(rchased on acco(nt '24&&&& . 5aterials reC(isitioned ,or the month as '1$&&&& '12&&& o, hich ere ,actory s(pplies. c. Factory payroll ,or the month as '1!&&&& o, hich '3&&&& as ,or indirect laorers. d. Depreciation on ,actory plant and eC(ipment ,or the month is '12&&& e. Factory taxes amo(nted to '1!&& ,. Factory ins(rance expired amo(nted to '432& g. Factory (tilities ,or the month amo(nted to '!&&& Additional 8n,ormation0 a. Act(al overhead is charged to prod(ction. . #!G o, the -os p(t into process are completed. c. All eginning inventory pl(s #!G o, the goods completed d(ring the period ere delivered to c(stomers at !&G mar>(p cost. 7he companyBs terms on sales are 3& days. 8nventories reported y the company at the eginning o, the month are0 a 5aterials
'$&&&&
6or in 'rocess
'1&&&&&
Finished oods
'"&&&&
EH98ED0 :1; Determine the ,olloing0 a. 7he total man(,act(ring cost ,or the period. . 3!22/ . 7he alances o, the inventory acco(nts at the end o, the month. 1. a 5aterials . 1//// 2. 6or in 'rocess . 1132/! 3. Finished oods . / c. 7he costs o, goods man(,act(red amo(nts to . 33"1! d. 7he costs o, goods sold amo(nts to . 31&11 e. 7he sales price o, the goods sold amo(nts to . &2/"& ,. ross pro,it ,or the period amo(nts to . 1!&3!" :2; o(rnal Entries to record the aove :9se a yello pad ,or yo(r entries.; :3; 'repare a Statement o, *osts o, oods 5an(,act(red and Sold in good ,orm
a. 5 inventory (ly 1 Add0 '(rchases a 5aterials Availale Less0 5 inventory (ly 31 :$&&&&I24&&&&>1$&&&&; 8ndirect 5aterial a 5aterials Direct Laor 5an(,act(ring Overhead 7otal 5an(,act(ring *ost
' $&&&& 24&&&& ' 32&&&&
. 1. 5 inventory (ly 1 Add0 '(rchases 5aterials 9sed 5 inventory (ly 31
' $&&&& 24&&&& >1$&&&& . 1////
2. 68' (ly 1 Direct 5aterial Direct Laor 5an(,act(ring Overhead 7otal *ost o, 6or p(t into 'rocess 5(ltiply y 68' (ly 31
' 1&&&&& 1"$&&& 12&&&& "4$2& ' 4!2$2& 2!G . 1132/!
3. *ost o, oods 5an(,act(red 5(ltiply y
' 33%"1! 2!G
>14&&&& >12&&& ' 1"$&&& 12&&&& "4$2& . 3!22/
. /
Finished oods c. 7otal *ost o, 6or p(t into 'rocess 5(ltiply y *ost o, oods 5an(,act(red d. Finished oods (ly 1 *5 :33%"1!#!G; *ost o, oods Sold
' 4!2$2& #!G . 33"1! ' "&&&& 2!4#11 . 31&11
e. :o(rnal Entries; ,. <(les 5an(,act(ring *ompany Statement o, *ost o, oods Sold (ly 31 2&12 a 5aterials 9sed0 5 iventory (ly 1 Add0 '(rchases a 5aterials Less0 8nventory (ly 31 8ndirect 5aterials 9sed Direct Laor 5an(,act(ring Overhead 8ndirect 5aterials 9sed 8ndirect Laor Depreciation 8ns(rance others 7otal 5an(,act(ring *osts Add0 6or in 'rocess (ly 1 7otal *ost o, or p(t into 'rocess Less0 6or in 'rocess (ly 31 *ost o, oods 5an(,act(red Add0 Finished oods (ly 1 oods Availale ,or sale Less0 Finished oods (ly 31 *ost o, oods Sold
' $&&&& 24&&&& . 32//// ' 14&&&& 12&&&
1!2&&& ' 1"$&&& 12&&&& ' 12&&& 3&&&& 12&&& 432& "!&&
"4$2& ' 3!2$2& 1&&&&& ' 4!2$2& >1132&! ' 33%"1! "&&&& ' 3%%"1! $4%&4 . 31&11
E4E5C'SE 1-! a.; Direct 5aterials 9sed
' 41 !&&
Direct Laor 5an(,act(ring Overhead 7otal 5an(,act(ring *ost
1! &&& 3& &&& ' $" !&&
.; 7otal 5an(,act(ring *ost Add0 6or in 'rocess
' $" !&& ! &&& ' %1 !&& :#% &&&; ' 12 !&&
c.; *ost o, oods Availale ,or Sale Less0 *ost o, oods 5an(,act(red Finished oods
' $" !&& :#% &&&; ' # !&&
d.; *ost o, oods Availale ,or Sale Less0 Finished oods Ending 8nventory *ost o, oods Sold
' $" !&& :" &&&; ' $& !&&
e.; Sales Less0 Sales Disco(nt +et Sales Less0 *ost o, oods Sold ross 'ro,it
' 112 !&& :# !&&; ' 1&! &&& $& !&& ' 24 !&&
,.; ross 'ro,it Less0 Operating Expenses +et 8ncome
' 24 !&& :13 !&&; ' 11 &&&
g.; 7otal 5an(,act(ring *ost Less0 Direct Laor 5an(,act(ring Overhead Direct 5aterials 9sed
' 1&& &&& :2& &&&; :2! &&&; ' !! &&&
h.; *ost o, oods 5an(,act(red Add0 6or in 'rocess Ending 8nventory 7otal *ost o, oods placed 8nto process Less0 7otal 5an(,act(ring *ost 6or in 'rocess
' 1&! &&& 1& &&& ' 11! &&& :1&& &&&; ' 1! &&&
i.; ross 'ro,it Add0 *ost o, oods Sold Sales Disco(nt Sales
' 3& &&& 112 &&& " &&& ' 14$ !&&
-.; *ost o, oods 5an(,act(red Finished oods
' 1&! &&& 2& &&& ' 12! &&&
.; *ost o, oods Availale ,or Sale Less0 Finished oods Ending 8nventory *ost o, oods Sold
' 12! &&& 12 !&& ' 112 !&&
l.; ross 'ro,it Less0 Operating Expenses +et 8ncome
' 3& &&& :1" &&&; ' 14 &&&
E4E5C'SE 1-" a.; Direct 5aterials 8ss(ed to 'rod(ction Direct Laor :1!& &&& x $&G; 7otal 'rime *ost ,or the 'eriod
' 4$& &&& 12& &&& ' "&& &&&
.; 8ndirect 5aterials 8ss(ed 8ndirect Laor :1!& &&& x 2&G; Depreciation o, Seing and *omp. eC(ipment 9tilities 'aid Factory 8ns(rance Expired Factory ent :+et o, 1& &&& deposit J !&&& adv. rental; 7otal 5an(,act(ring Overhead Add0 Direct Laor :!& &&& x $&G; 7otal *onversion *ost ,or the 'eriod
' 4 !&& 3& &&& $ &&& 22 &&& # !&& "& &&& ' 132 &&& 12& &&& ' 2!2 &&&
c.; Direct 5aterials 8ss(ed to 'rod(ction Direct Laor :1!& &&& x $&G; 5an(,act(ring Overhead 7otal 5an(,act(ring *ost Less0 6or in 'rocess Ending 8nventory *ost o, oods 5an(,act(red ,or the year
' 4$& &&& 12& &&& 132 &&& ' #32 &&& :!& &&&; ' "$2 &&&
d.; *ost o, oods 5an(,act(red ,or the year 5(ltiply y0 'ercentage o, (nits sold *ost o, oods Sold 5(ltiply y0 'ercentage o, ross pro,it ross 'ro,it ,or the 'eriod
' "$2 &&& $&G ' !4! "&& 3!G ' 1%& %"&
E4E5C'SE 1-& 'tem (um)er 21. 22. 23. 24. 2!. 2". 2#. 2$. 2%. 3&. 31. 32. 33. 34. 3!. Other *ategory 3". Other *ategory 3#. Other *ategory 3$. 3%. 4&. #otal
*irect $aterials
*irect +a)or
$anufacturing
' !& &&& 2& &&& ' 1& &&& ' 2 !&& ' 1! &&& ! &&& 1 2&& 2$ &&& 2 $&& $ !&& 3 !&& % &&& $&& 2 4&&
! &&&
. 1/3 ///
. 1! ///
1 !&& # !&& . 3& !//
#est $aterial 1. /ighest Loest Di,,erence
5achine ho(rs 12&& 4&& $&&
'oer costs 144&& 12$&& 1"&&
*)(nit 1"&&)$&& ' 2 2. /ighest Loest Di,,erence *)(nit
Fixed cost0 :highest;
.eriod Cost
/rs. ored 33"& 2"&& #"& 33$&)#"& '4.44#3"$421
33"& x 4.44#3"$421 ' 14%43.1"
9tility costs 2144& 1$&"& 33$&
. 1& 2//
:loest;
2"&& x 4.44#3"$421 ' 11!"3.1"
/ighest
'2144& > 14%43.1" '"4%".$4
Loest
'1$&"& > 11!"3.1" '"4%".$4
7otal 9tility costs
:' 2$!& x 4.44#3"$421; I "4%".$4 ' 1%1#1. $4
3. ross 'ro,it *ost o, goods man(,act(red 8ncrease in ,inished goods 7otal sales 4. *ost o, ,aric (sed in dresses
' #"$&&& 2#2&&&& :!"&&&; '3432&&& ' "&&&&
!. 6ages o, dressmaers 6ages o, dress designers Direct laor
' !&&& 4&&& ' %&&&
". 6ages o, the maintenance employee *ost o, electricity in the shop *ost o, space rental
' 2&&& 3!&& "!&&
Overhead
'12&&&
#. O,,ice depreciation Freight costs ,or goods delivered to c(stomers anitorBs ages ,or cleaning the o,,ice 7otal selling general J administrative expenses 'eriod costs
'2$&&& 12&&& 1&&&& 1"!&&& '21!&&&
$. 5aterials Direct laor Factory depreciation Freight costs ,or materials p(rchased anitorBs ages ,or cleaning the prod(ction area 'rod(ct costs
'2"4&&& 143&&& !&&&& $&&& 1&&&& '4#!&&&
%. Direct material K1"4&&&&>:1"4&&&&x1&G;I!4&&&&>!#&&&& Direct laor 5O/ :1"4&&&I1$&&&&I3"&&&&I12&&&&; 7otal ,actory costs
1&. 7otal ,actory costs 6or in process>eg. 6or in process>end. *ost o, goods man(,act(red Finished goods>eg. Finished goods>end. *ost o, goods sold
'144"&&& $4&&&& $24&&& '311&&&&
'311&&&& "&&&&& :44&&&&; '32#&&&& !$&&&& :4&&&&&; '34!&&&&&
11. ross 'ro,it K:34!&&&&)#!G; x 2!G O,,ice salaries Sales salaries +et 8ncome
'11!&&&& :14&&&&; : $&&&&; ' %3&&&&
12. 7otal ,actory costs :'12!&&I4!&&&I%&&&&; *ost o, goods man(,act(red 68' end. 68' eg.
:' 14#!&&; 23#&&& 3#!&& ' 12#&&&
13. *ost o, goods availale ,or sale oods prod(ced F end 8ncrease in F
' 2!%!&& :23#&&&; : 1$&&&; ' 4!&&
14. Sales :33#!&&>#!&&; *ost o, goods availale ,or sale F end ross 'ro,it
' 33&&&& :2!%!&&; 1$&&& ' $$!&&
1!. ross 'ro,it Sales Disco(nt *ost o, goods sold Sales
'1!&&&& 3&&&& !"2!&& '#42!&&
1". Direct laor Direct materials 5O/ :11&&&&I!&&&&I31&&&I$&&&I!&&&;
' 3!&&&& 4"&&&& 23%&&&
7otal ,actory costs 1#. 7otal ,actory costs 68' eg. 68' end. *ost o, goods man(,act(red
'1&4%&&& '1&4%&&& 22&&&& :1"&!&&; '11&$!&&
1$. 7otal Factory costs :'"24&& I32&&&I "4&&&; 68' eg. 68' end *ost o, goods man(,act(red
' 1!$4&& 14#&& :1"%&&; ' 1!"2&&
1%. Sales *ost o, goods sold :1!"2&& I12"&& >1&!&&; ross 'ro,it
' 2&&&&& :1!$3&&; ' 41#&&
2&. Same anser and sol(tion in n(mer 3.
7est 5aterial ! 1. Direct 5aterials :1#4&&&>132&&&I1!&&&&&; Direct laor K:21&&&x4!; I :1&&&x4!; 'rime costs
' 1!42&&& %%&&&& ' 2!32&&& c.
2. Direct laor :21&&&x4!; 5O/ K:3&&&&& I1#!&&& I :1.! x 4!; *onversion costs
' %4!&&& !42!&& ' 14$#!&& d.
3. d. 5aterials :32&&&&&>1$&&&&; Laor K"%&&&&&I:2&4&&&&>32&&&&;>2&4&&&&"!$&&&& K"!$&&&&I:$&&&&& x %&G;>$&&&&&"!&&&&&>3&2&&&& ) 1"&G Overhead :21#!&&& x "&G;
' 12#!&&& '13&!&&&
4. 'rime *osts Direct laor :4!&&&&&)1!&G; Decrease in ra materials a material p(rchases
' "#!&&&& :3&&&&&&; : 2!&&&&; ' 3!&&&&& c.
!. Direct material :44&&&&&I%&&&&&&>2$&&&&&>$!&&&&; *onversion costs K"!&&&&&I12!&&&&I!"&&&&I:12&&&&&x"&G; I:"&&&&&x"&G;I:1!&&&&&x"&G;I$!&&&& 68' eg. 68' end. *ost o, goods man(,act(red
' %#!&&&&
' 3&2&&&&
114&&&&& 3&&&&&& :24&&&&&; '214%&&&& a.
". *ost o, goods man(,act(red F eg. F end. *ost o, goods sold Divided y0 7otal sales
' 214%&&&& 24&&&&& :2%!&&&&; ' 2&%4&&&& #! G ' 2#%2&&&& a.
#. c. 6or in process inventory0 MK#%2&&&& ) :3$.!&>3&.$&; x 3&.$&N 3!2&&&& 3!2&&&& I 13"$&&&& 1#4&&&&& decrease o, 2&&&&& Finished goods inventory0 :1#4&&&&&I1!&&&&&>1"$&&&&&; 21&&&&& 21&&&&&>1!&&&&& increase o, "&&&&& $. Sales :2!&&& ) 12.! G; ross pro,it :2!&&&I2!&&&; *ost o, goods sold
' 2&&&&& : !&&&&; '1!&&&& .
%.
' $&&&& 14&&&& 21&&&& ' 2&!&&& 2%&&&& 43!&&& '1&1&&&& c.
1&. Overhead applied Overhead act(al Over applied
11. 7otal man(,act(ring cost0 ' %#!&&&>"&&&&&I!!&&&>4&&&&I1!&&&>3!&&&
' 43!&&& :42&&&&; ' 1!&&& a.
12. 7otal ra materials p(rchased0 ' 3#&&&&>:!2&&&&>4&&&&&;>:12&&&&)#!G;I1&&&&>!&&&
' 3#&&&& a.
' %!&&& d.
13. F end0 ' $!&&&I%#&&&&>11&&&& I :4$&&& x 2&; I :4$&&& x 2& x "&G; I %&&&& 2#1&&& I1$&&&&>:1&!&&&&)"&G; #3&&&& c. 14. Sales reven(e0
' 1&!&&&&)"&G ' 1#!&&&& x 1"&G ' 2$&&&&& . 1!. Direct laor :3&1&1.$&) !&G; 5O/ **
' "&2&3." 3&1&1.$ ' %&3&!.4& ) !&G '1$&"1&.$&
' 1$&"1&.$& I !%& ' 1$12&&.$& . 1". 5 availale ,or (sed 5 iss(ed to prod(ction 5 eg. :4#!&&>3#!&&; 8ncrease in 5
' 4#!&& :3&&&&; :1&&&&; ' #!&& d.
1#. . Direct material :' 1!&&&I 33&&& 1%&&& 1&&&; 5* :' 12&&&I3&&&&>4&&&&; F (ne 3& :' 1%&&&&>14&&&&;
' 2$&&& ' 11&&&& ' !&&&&
1$. 5aterials :' 3$&&&&>2&&&&; Direct laor :' 42&&&&>4&&&&; 'rime costs
' 3"&&&& 3$&&&& '#4&&&& .
1%. 5O/ :' 3$&&&& ) 2& ' 1%&&& x 2$; 'rime costs 68' eg. *ost o, goods man(,act(red 68' end
' !32&&& #4&&&& 2&&&& %4&&&& ' 3!2&&& a.
2&. Same sol(tion and anser in n(mer #.
