Assignment 1 send 29 09 2014

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Assignment-1 Cost Concept-29-09-2014 Question 1: Cost drivers and functions: The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column. That is, they do not match. Function Representative Cost Driver 1. 2. 3. 4. A. Number of invoices sent B. Number of purchase orders C. Number of Research scientists D. Hours of computer processing unit (CPU) E. Number of new hires F. Number of transaction processed Accounting Personnel Data processing Research and Development 5. Purchasing 6. Billing 1. Match each function with its representative cost driver. 2. Give a second example of a cost driver for each function. Question 2: Total costs and unit costs: Ms. Thomas…show more content…
Case 1 Case 2 Accounts receivable, 12/31 Rs. 6,000 Rs.2, 100 Cost of goods sold A 20,000 Accounts Payable, 1/1 3,000 1,700 Accounts payable, 12/31 1,800 1,700 Finished goods inventory, 12/31 Gross Margin B 11,300 5,300 C 1 Work in progress, 1/1 Work in progress 12/31 Finished goods inventory, 1/1 Direct material used Direct manufacturing labor Indirect manufacturing costs Purchase of Direct material Revenues Accounts Receivable, 1/1 0 0 4,000 8,000 3,000 7,000 9,000 32,000 2,000 800 3,000 4,000 12,000 5,000 D 7,000 31,800 1,400 Question 4: Fire loss, computing inventory costs. A distraught employee, Mr. Unsatisfied put a torch to manufacturing plant on a blustery February 26. The resulting blaze destroyed the plant and its content. Fortunately, certain accounting records were kept in another building. They reveal the following for the period from January 1 to February 28, current year. Direct material purchased Work in process, 1st January Direct materials, 1st January Finished goods, 1st January Indirect manufacturing costs Revenues Direct manufacturing labor Prime costs Gross margin percentage based on revenue Cost of goods available for sale Rs 1, 60,000 3, 40,000 1, 60,000 3, 00,000 40% of conversion costs 50, 00,000 18, 00,000 29, 40,000 20% 45, 00,000 The loss is fully covered by insurance. The insurance company wants to know the historical cost of the inventories as a basis for negotiating a settlement, although the settlement is

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