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    Additional Exercises (ABC and VC) - 1

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    michelle donaire
    MS

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    Additional Exercises (ABC and VC) - 1

    Uploaded by

    michelle donaire
    25 views2 pages
    MS

    Original Title

    Additional Exercises (ABC and VC)-1

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    MS

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views2 pages

    Additional Exercises (ABC and VC) - 1

    Uploaded by

    michelle donaire
    MS

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Additional Exercises on Variable Costing and Activity-Based Costing

    Activity Based Costing


    Manoli Company has collected the following data for use in calculating product costs:

    Activity Data (expected and actual):

    Rug Cleaners Sweepers Total


    Units produced 50,000 250,000 300,000
    Prime costs P 200,000 P 750,000 P 950,000
    Direct labor hours 10,000 40,000 50,000
    Machine hours 20,000 10,000 30,000
    Number of setups 25 75 100
    Inspection hours 1200 2,800 4,000
    Number of moves 140 210 350

    Departmental Data (expected and actual)

    Molding Assembly Total


    Direct labor hours:
    Rug cleaners 5,000 5,000 10,000
    Sweepers 5,000 35,000 40,000
    Totals 10,000 40,000 50,000
    Machine hours:
    Rug cleaners 17,000 3,000 20,000
    Sweepers 3,000 7,000 10,000
    Totals 20,000 10,000 30,000
    Overhead costs:
    Machining P 120,000 P 30,000 P 150,000
    Moving materials P 40,000 P 30,000 P 70,000
    Setting up P 70,000 P 10,000 P 80,000
    Inspecting products P 20,000 P 30,000 P 50,000
    Totals P 250,000 P 100,000 P 350,000

    Required:
    1. What is the unit product cost for rug cleaners if a plant-wide rate is used based on direct labor hours?
    2. Manoli Company uses departmental overhead rates: Molding uses machine hours and Assembly uses labor
    hours. What is the unit product cost for sweepers if departmental overhead rates are used?
    3. What are the consumption ratios for rug cleaners and sweepers, respectively, for the inspection of products
    activity?
    4. What is the consumption ratio for the plantwide activity rate of direct labor hours?
    5. What are the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers
    (Molding; Assembly)?
    6. What is the activity rate for moving materials?
    7. What is the unit product cost for rug cleaners using activity-based costing?
    Additional Exercises on Variable Costing and Activity-Based Costing

    Variable Costing
    During the current period, McLaughlin Company sold 60,000 units of product at $30 per unit. At the beginning of the
    period, there were 10,000 units in inventory and McLaughlin Company manufactured 50,000 units during the period.
    The manufacturing costs and selling and administrative were as follows:

    Required:
    1. Prepare an income statement based on the absorption costing concept.
    2. Prepare an income statement based on the variable costing concept.
    3. Give the reason for the difference in the amount of operating income in parts (1) and (2).

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