COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Chapter 2, Problem 2.19MCQ
Year 1 financial data for the ABC Company is as follows:
| Sales | $5,000,000 |
| Direct materials | 850,000 |
| Direct manufacturing labor | 1,700,000 |
| Variable manufacturing |
400,000 |
| Fixed manufacturing overhead | 750,000 |
| Variable SG&A | 150,000 |
| Fixed SG&A | 250,000 |
Under the absorption method, Year 1 Cost of Goods sold will be:
- a. $2,550,000
- b. $3,100,000
- c. $2,950,000
- d. $3,700,000
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$8,120,000
6,496,000
$32.00
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22.00
1,624,000
10.00
690,000
3.00
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$ 934,900
$ 7.00
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$280,000.
$140,000.
$56,000.
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6. .Using the algebraic method, department B's cost allocated to department C is:
а. Р 7,794
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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follws:
Year 2
Sales (e $64 per unit)
Cost of goods sold (e $37 per unit)
Gross margin
Selling and administrative expenses
Year 1
$ 1,152, 000 $ 1,792, 000
666, 000
486, 000
301, 000
$ 185, 000
1,836, 000
756, 000
331, 000
$ 425, 000
Net operating incone
•$3 per unit varlable, $247,000 fixed each year.
The company's $37 unit product cost is computed as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufactüring overhead ($391, 00e + 23, 000 units)
$ 6
10
4.
17
$ 37
Absorption costing unit product cost
Production and cost data for the first two years of operations are:
Units produced
Units sold
Year 1
23, 000
18, 000
Year 2
23, 000
28, 000
Required:
1. Using variable costing, what is the unit product cost for both years?
2. What is the variable costing net operating income in Year 1 and in Year 2?
3. Reconcile the absorption costing and the…
Chapter 2 Solutions
COST ACCOUNTING
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16MCQCh. 2 - Comprehensive Care Nursing Home is required by...Ch. 2 - Frisco Corporation is analyzing its fixed and...Ch. 2 - Year 1 financial data for the ABC Company is as...Ch. 2 - The following information was extracted from the...Ch. 2 - Computing and interpreting manufacturing unit...Ch. 2 - Direct, indirect, fixed, and variable costs....Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Classification of costs, manufacturing sector. The...Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Variable and Fixed Costs. Consolidated Motors...Ch. 2 - Variable costs, fixed costs, relevant range. Gummy...Ch. 2 - Prob. 2.29ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Total costs and unit costs, service setting....Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Inventoriable costs versus period costs. Each of...Ch. 2 - Computing cost of goods purchased and cost of...Ch. 2 - Cost of goods purchased, cost of goods sold, and...Ch. 2 - Flow of Inventoriable Costs. Renkas Heaters...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Interpretation of statements (continuation of...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Terminology, interpretation of statements...Ch. 2 - Labor cost, overtime, and idle time. David...Ch. 2 - Missing records, computing inventory costs. Ron...Ch. 2 - Comprehensive problem on unit costs, product...Ch. 2 - Prob. 2.46PCh. 2 - Cost classification; ethics. Paul Howard, the new...Ch. 2 - Prob. 2.48P
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