Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 1P
The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once.
Required:
Select the graph that matches the lettered cost described here.
- a.
Depreciation of equipment–the amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. - b. Electricity bill–flat fixed charge, plus a variable cost after a certain number of kilowatt hours are used.
- c. City water bill–computed as follows:
- d. Depreciation of equipment–the amount is computed by the straight-line method.
- e. Rent on a factory building donated by the city–the agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid.
- f. Salaries of repair workers–one repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
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The first step in applying the average cost method when computing for the unit cost is to:
a. Add the beginning work in process costs to the current period’s production costs.
b. Divide the current period’s production costs by the equivalent units.
c. Subtract the beginning work in process costs from the current period’s production costs.
d. A and B
In the formula Y = a + bX, b represents the estimated Blank______.
Multiple choice question.
total fixed manufacturing overhead cost
total manufacturing overhead cost
total amount of the allocation base
variable manufacturing overhead cost per unit
Select the graph (A through L) that best matches the numbered (1 through 7) italicized descriptions of various cost behavior. For each graph, the vertical (y) axis represents total dollars of cost,and the horizontal (x) axis represents output units during the period. The graphs may be usedmore than once.1. The cost of depreciation. The asset being depreciated is a large piece of production machinery equipment where the straight-line depreciation method is used.letter ______2. The cost of operating a forklift. The forklift is used to move work-in-process inventory ingroups of 100 units across the factory floor.letter ______3. The cost of direct materials. The first 2,000 pounds of direct materials are free because theyare donated by the local city government. After that, the direct materials cost consists of aper-unit amount that decreases after a threshold of 2,500 total pounds is reached.letter ______4. The cost of inspecting finished goods inventory. Each unit is inspected by a…
Chapter 4 Solutions
Principles of Cost Accounting
Ch. 4 - What are factory overhead expenses, and what...Ch. 4 - What are three categories of factory overhead...Ch. 4 - What are the distinguishing characteristics of...Ch. 4 - When a products cost is composed of fixed and...Ch. 4 - What effect does a change in volume have on total...Ch. 4 - Distinguish between a step-variable cost and a...Ch. 4 - What is the basic premise underlying the high-low...Ch. 4 - What are the advantages and disadvantages of the...Ch. 4 - Differentiate between an independent variable and...Ch. 4 - Prob. 10Q
Ch. 4 - What is a flexible budget, and how can management...Ch. 4 - How does accounting for factory overhead differ in...Ch. 4 - What is the function and use of each of the two...Ch. 4 - What are two types of departments found in a...Ch. 4 - What are the two most frequently used methods of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - Is it possible to close the total factory overhead...Ch. 4 - What are the shortcomings of waiting until the...Ch. 4 - What are the two types of budget data needed to...Ch. 4 - Prob. 21QCh. 4 - What factory operating conditions and data are...Ch. 4 - Prob. 23QCh. 4 - How does activity-based costing differ from...Ch. 4 - What steps must a company take to successfully...Ch. 4 - What is the relationship between activity-based...Ch. 4 - Prob. 27QCh. 4 - Prob. 28QCh. 4 - If the factory overhead control account has a...Ch. 4 - Prob. 30QCh. 4 - Classify each of the following items of factory...Ch. 4 - Ames Automotive Company has accumulated the...Ch. 4 - Prob. 3ECh. 4 - Using the data in E4-2 and spreadsheet software,...Ch. 4 - El Paso Products Company has accumulated the...Ch. 4 - Computing unit costs at different levels of...Ch. 4 - Identifying basis for distribution of service...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - Compute the total job cost for each of the...Ch. 4 - Classify each of the following items of factory...Ch. 4 - Job 25AX required 5,000 for direct materials,...Ch. 4 - Job 19AB required 10,000 for direct materials,...Ch. 4 - Match each of the following cost pools with the...Ch. 4 - The books of Petry Products Co. revealed that the...Ch. 4 - The general ledger of Lawson Lumber Co. contains...Ch. 4 - Nelson Fabrication Inc. had a remaining credit...Ch. 4 - Housley Paints Co. had a remaining debit balance...Ch. 4 - The cost behavior patterns below are lettered A...Ch. 4 - Miller Minerals Co. manufactures a product that...Ch. 4 - Scattergraph method Using the data in P4-2 and a...Ch. 4 - Using the data in P4-2 and Microsoft Excel: 1....Ch. 4 - Listed below are the budgeted factory overhead...Ch. 4 - Menlo Materials is divided into five departments,...Ch. 4 - Distribution of service department costs to...Ch. 4 - Journalizing the distribution of service...Ch. 4 - Channel Products Inc. uses the job order cost...Ch. 4 - Determining job costcalculation of predetermined...Ch. 4 - Focus Fabrication Co. uses ABC. The factory...Ch. 4 - Mansfield Manufacturing Co. uses ABC. The factory...Ch. 4 - Hughes Products Inc. uses a job order cost system....Ch. 4 - Abbey Products Company is studying the results of...Ch. 4 - The following information, taken from the books of...Ch. 4 - Rockford Company has four departmental accounts:...Ch. 4 - Luna Manufacturing Inc. completed Job 2525 on May...Ch. 4 - Phillips Products, Inc. had a remaining credit...Ch. 4 - Nathan Industries had a remaining debit balance of...Ch. 4 - Chrome Solutions Company manufactures special...Ch. 4 - Activity-based Costing
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- Matching Cost Behavior Descriptions to Cost Behavior Graphs Select the graph (A through L) that best matches the numbered (1 through 7) italicized descriptions of various cost behavior. For each graph, the vertical (y) axis represents total dollars of cost, and the horizontal (x) axis represents output units during the period. The graphs may be used more than once. 1. The cost of depreciation. The asset being depreciated is a large piece of production machinery equipment where the straight-line depreciation method is used. letter _________ 2. The cost of operating a forklift. The forklift is used to move work-in-process inventory in groups of 100 units across the factory floor. letter _________ 3. The cost of direct materials. The first 2,000 pounds of direct materials are free because they are donated by the local city government. After that, the direct materials cost consists of a per-unit amount that decreases after a threshold of 2,500 total pounds is reached. letter _________ 4. The cost of inspecting finished goods inventory. Each unit is inspected by a quality expert who is paid the same amount for each unit inspected. letter _________ 5. The cost of product shipping for all output shipped in the period. The shipping cost per unit decreases with each unit shipped up to a certain number of units, at which time the shipping cost per unit remains constant. letter _________ 6. The cost of compliance with Environmental Protection Agency (EPA) regulations. An electric car plant manufactures car batteries. Part of the manufacturing process involves the emission of toxic chemicals into the environment, which is regulated by the EPA in the form of a fee assessed on a per-unit manufactured basis. The per-unit cost of complying with these regulations increases with every fifth battery produced. letter ______ 7. The cost of customer energy consumption. The local electric utility company uses a pricing system designed to encourage customers to conserve energy usage. Therefore, the rate per kilowatt-hour that is charged to customers increases with each hour the customer consumes. letter _______arrow_forwardIn the formula Y = a + bX, X represents the estimated Blank______. Multiple choice question. total amount of the allocation base total fixed manufacturing overhead cost total manufacturing overhead cost variable manufacturing cost per unitarrow_forwardPlease refer the queations to the images attached. Thank you. Required: Compute equivalent units of production. Prepare the cost of production. Round total costs to the nearest peso.arrow_forward
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