Acct 325 Managerial Accounting

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…...