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This 5 page Class Notes was uploaded by Reid Jones on Sunday October 25, 2015. The Class Notes belongs to 225 at University of Washington taught by Joseph B. Paperman in Fall 2015. Since its upload, it has received 14 views. For similar materials see Managerial Accounting in Accounting at University of Washington.
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Date Created: 10/25/15
Accounting 225 Quiz Section 1 Chapter 2 1 Class Exercises 1 Wollogong Group Ltd of New South Wales Australia acquired its factory building about 10 years ago For several years the company has rented out a small anneX attached to the rear of the building The company has received a rental income of 30000 per year on this space The renter39s lease will eXpire soon and rather than renewing the lease the company has decided to use the space itself to manufacture a new product Direct materials cost for the new product will be 80 per unit To have a place to store finished units of product the company will rent a small warehouse nearby The rental cost will be 500 per month In addition the company must rent equipment for use in producing the new product the rental cost will be 4000 per month Workers will be hired to manufacture the new product with direct labor cost amounting to 60 per unit The space in the anneX will continue to be depreciated on a straight line basis as in prior years This depreciation is 8000 per year Advertising costs for the new product will total 50000 per year A supervisor will be hired to oversee production her salary will be 1500 per month Electricity for operating machines will be 120 per unit Costs of shipping the new product to customers will be 9 per unit To provide funds to purchase materials meet payrolls and so forth the company will have to liquidate some temporary investments These investments are presently yielding a return of about 3000 per year Product Cost Period Cost Variab Fixe Direct Manufacturi selling Sun Ie d Materia Direct ng and Opportuni k Name ofthe Cost Cost Cost Is Labor Overhead admin ty Cost Cost Accounting 225 Quiz Section 1 Chapter 2 1 Class Exercises Accounting 225 Quiz Section 1 Chapter 2 1 Class Exercises 2 You are an intern at WiddiGnomerson Corporation Management has asked for your help in preparing some reports for June Raw materials beginning inventory balance was 20000 The company purchased 69000 of raw materials during the month the ending raw materials inventory balance was 32000 Direct labor cost incurred in June was 24000 which was 25 of conversion cost for the month Beginning work in process balance was 22000 the ending balance was 19000 Beginning and ending finished goods balances were 53000 and 51000 respectively The company incurred 20000 in selling eXpense and 35000 administrative eXpense during the month Use the space below for T Accounts a What was the prime cost for June b What was the Cost of Goods Manufactured for June c What was the Cost of Goods Sold for June Accounting 225 Quiz Section 1 Chapter 2 1 Class Exercises For each item in the table below indicate whether the cost behaVior appears to be fixed F variable V or mixed M Total Cost to Total Cost to Cost Item Produce 5000 Produce 3000 F V or M units units Cost A 13500 13500 Cost B 22500 15500 Cost C 62500 37500 For each item in the table below indicate whether the cost is direct D or indirect I with respect to the cost object listed next to it Cost Item Cost Object D or I Salary of the president of a home A particular home being built construction company Accounting 225 Quiz Section 1 Chapter 2 1 Class Exercises Cost of lubrication oil used at the auto The auto repair shop repair shop of an automobile dealer The total tip given to a waiter by a group A particular member of the group of 10 people dining together Slonaker Inc has provided the following data concerning its maintenance costs i RquotlizliilllllC39 ULll lRquotlillllLCllizlllLIC LUE39BL April 5 73999 3 03 7399 hie 5 7quot 82 3 02 89 Ttme 5764 3023 July 5761 830233 August 5 7quot 391 7quot 3 I I 7quot 8 September 5 73995 3 0 6E Cleteber 5 809 3 03 8 8 Nevember 5 8 I 391 3 0 3 7quot 8 December 5 739 87 3031 8 Management believes that maintenance cost is a mixed cost that depends on machine hours Estimate the variable cost per machinehour and the xed cost per month using the high low method Show your work