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Managerial Accounting fourteenth edition McGraw-Hill Irwin
Chapter 2
Exercise 2-1
1. Direct labor cost
2. Marketing and selling cost
3. Direct material cost
4. manufacturing overhead cost
5. manufacturing overhead cost, Marketing and selling cost, administrative cost
6. Administrative cost
7. Marketing and selling cost
8. Manufacturing overhead cost
Exercise 2-2
1. Product cost
2. Product cost
3. Product cost
4. Period cost
5. Product cost
6. Period cost
7. Product cost
8. Period cost
9. Period cost
10. Product cost
11. Product cost
12. Period cost
13. Product cost
14. Period cost
15. Product cost
Exercise 2-4
Note: Highest (August 3,608- 8,111)
Lowest (October 186- 1,712)
1. The first step in the using high- low method is to determine the months with the highest and lowest activity (in this case, occupancy day) This will not necessarily result in the highest and lowest costs. Next, we determine the difference between the change in cost over change in activity
highest activity 3,608 8,111
lowest activity - 186 - 1,712
3,422 6,399
Variable cost per unit of activity 6,399 = $1.87
3422
Finally, we are trying to determine the fixed and variable portion of the cost. To do this, take either the highest or lowest cost.
Total cost (August) $8,111
($1.87 per occupancy day *3,608 occupancy day) - 6,747
fixed cost elemen
Exercise 2- 6
Direct l Indirect
cost l cost
X l
1. X l
2. l X
3. l X
4. l X
5. l X
6. X l
7. l X
8. X l
Exercise 2- 8
Units Produced and Sold
60,000 80,000 250,000
Total costs:
Variable costs… $150,000 200,000 250,000
Fixed costs…...