Chapter 2 HW
Exercises #s: 3,5,6,9,11,12,13
A. Economic Order Quantity: = EOQ
EOQ = 2 x cost of order x number of units required annually / Carrying Cost
EOQ= 2 x $40 x 225,000 / $2
EOQ= $18,000,000 / $2
Earl Companys direct labor costs for the month of January are as follows:
Actual direct labor hours
Standard direct labor hours
Direct labor rate variance-unfavorable
What was Earls direct labor eff
price variance for
Total From Factory
Building Maintenance Factory Office
Sq. Ft. (Basis)- Floor Space
$6,400 /32,000 Sq. Ft. = $0.20 Sq. Ft
Factory Office: 7000 x .20
A. Question 1
Absorption Costing: It is known as full costing. This information is used by both internal and
external parties. The product costs consist of Fixed and Variable Manufacturing costs
Variable Costing: It is known as direct costing. This inform
Chapter 8 HW
Standard Cost Summary
$8 x 2 lbs =
$10 x 1 Hr, =
Standard Unit Cost
Case 1: Materials Price Variance
AQ (AP - SP)
=$2,000 ($8.50 - $8.00)
Professional Labor Cost
50 x 57.14
45 x 57.14
50 x 39.05
45 x 39.05
5 x 1500 = 7500 hours
2 x 1500 = 3000 hours
Chapter 8 Discussion
The data below relate to the month of May for Sosa Inc., which
uses a standard cost system and two-variance analysis of
Actual total direct
Standard hours allowed for good
Chapter 7 HW
Exercises # 1,2,3,4,5,8,9 and Problem 7-2
For Month Ended June 30
For Month End
Exercises # 1,3,4,7,8,9,11 and Problem 6-1
Unit output for period
Added to work started in
process, Finished during
Added to work in process,
end of period
Labor and factory overhead
Added to work
Chapter 5 HW
Exercises # 2,3,4,7,8,10 and Problem 5-1
Beginning units in
Units Started In
Less units transferred
to finished goods
Ending units in
Units finished during
Food for thought #1:
Under what conditions the unit costs of materials, labor, and overhead may
be computed by using only one equivalent production figure?
This can happen when they are applied uniformly during the processing period. The unit cost
What are the characteristics of an effective physical control of materials? List different
The methods involved in the physical control of materials are; limited access to storage areas with a
paper trail, Segregation of duties, and Accuracy i
Week 1 - Chapter One
Exercises #1,2,3,4,8,9,10 and problems 1-1, 1-2
E1-1: September variances for Food and Supplies were deemed Unfavorable. Anytime you are
able to budget more than you actually spend this is deemed to be a favorable outcome. These
Chapter 5 Discussion
#1: What are the differences between job order and process cost accounting systems? Give
Job order costing is a system that is designed for custom order jobs. A custom furniture
manufacturer that sells made to order chairs o
Chapter 3 Discussion
1. What is the difference between direct and indirect labor?
Direct labor is debited from the work in process account and is attributed to individual jobs
worked during a given period.
Indirect Labor is charged to the factory overhead
Chapter 4 Discussion
What is factory overhead? How can you identify cost behavior patterns?
Factory overhead is the total costs of operating a production / manufacturing facility. Indirect
labor and indirect materials are factored under the general journa
HW Chapter 4
Exercise #1,2,4,6,7,10 and problem 4-2
C. Insurance on building
e. Depreciation on building
I. Property taxes
Q. Plant manager salary
A. Indirect labor (Could be semi-variable)
b. Indirect materials (C
For federal tax purposes, gross income from the sale of tangible goods is reduced by the seller's cost of
Taxable income is defined as gross income minus allowable deductions and credits.
Gain or loss realized on the disposition of property is recognized unless the tax law provides a
According to the realization principle, an increase in the value of an asset is not accounted for a
Tax neutrality for asset exchanges is the exception rather than the rule.
When unrelated parties agree to an exchange of noncash properties, the economic presumption is that the
properties are of equal value.
A tax meets the standard of sufficiency if it is easy for people to pay the tax.
The federal government is not required to pay interest on the national debt.
A static forecast of the revenue effect of a tax r
Net cash flow from a transaction equals the difference between cash received and cash disbursed in the
The present value of a dollar available in a future period increases as the discount rate increases.
The goal of tax planning is to reduce tax costs or increase tax savings as much as possible.
Tax avoidance is the reduction of a person's tax liability through illegal means.
Tax evasion is a federal crime pu
Payment of a tax entitles the payer to a specific good or service from the government.
A user fee entitles the payer to a specific good or service from the government.
A tax is intended to deter or punish una
Cycle For a
ANSWERS TO DISCUSSION QUESTIONS
Income Statement and Balance Sheet columns.
+ Net Purchases
= Cost of Goods Sold