ConvertInsertMANAGEMENT SCIENCEASSESSMENT TASKSPROBLEM 1.For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost ofplacing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N)Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period.1. Hourly fee for inventory audit.2 Salary of purchasing supervisor.3. Costs to audit purchase orders and invoices, on a per-order basis.4. Taxes on inventory.5. Stockout costs.6. Storage costs charged per unit in inventory.7. Fire insurance on inventory.8. Fire insurance on warehouse.9. Obsolescence costs on inventory. |10. Shipping costs per shipment.PROBLEM 2The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels of wheat annually. The wheat mustbe purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500,are P5,000 per order. Annual carrying costs are 2 percent of the purchase price of PS per bushel. The companymaintains a safety stock of 200,000 bushels. The delivery time is 6 weeks.REQUIRED:

Carrying costs includes all those expenses which incurred on holding and storing the unsold goods.

PROBLEM 1. For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost of placing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N) Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period. 1. Hourly fee for inventory audit. 2. Salary of purchasing supervisor. 3. Costs to audit purchase orders and invoices, on a per-order basis. 4. Taxes on inventory. 5. Stockout costs. 6. Storage costs charged per umit in inventory. 7. Fire insurance on inventory. 8. Fire insurance on warehouse. 9. Obsolescence costs on inventory. | 10. Shipping costs per shipment. PROBLEM 2 The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels ofwheat annually. The wheat must be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500, are P5,000 per order. Annual carying costs are 2 percent of the purchase price of P5 per bushel. The company maintains a safety stock of 200,000 bushels. The delivery time is 6 weeks. REQUIRED:

PROBLEM 1. For each of the following costs, indicate whether the cost would be an out-of-pocket carrying cost (C), or a cost of placing an order (P). If the item does not qualify for either of these categories, note that it as none of the above (N) Assume that wages vary with the level of work while salaries are fixed for a monthly or longer time period. 1. Hourly fee for inventory audit. 2. Salary of purchasing supervisor. 3. Costs to audit purchase orders and invoices, on a per-order basis. 4. Taxes on inventory. 5. Stockout costs. 6. Storage costs charged per umit in inventory. 7. Fire insurance on inventory. 8. Fire insurance on warehouse. 9. Obsolescence costs on inventory. | 10. Shipping costs per shipment. PROBLEM 2 The Strawberry Bread Company buys and then sells (as bread) 2.6 million bushels ofwheat annually. The wheat must be purchased in multiples of 2,000 bushels. Ordering costs, which include grain elevator removal charges of P3,500, are P5,000 per order. Annual carying costs are 2 percent of the purchase price of P5 per bushel. The company maintains a safety stock of 200,000 bushels. The delivery time is 6 weeks. REQUIRED:

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 4P: Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2....

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В. Explain the following: Product costs and Period costs and one example of each. Distinguish clearly between Financial Accounting and Management Accounting under 3 (THREE) different factors, which are: i. Stakeholders, ii. Time frame and iii. Regulations. С. Before calculating costs we need to understand how different costs behave. In cost accounting we typically classify costs by three types of behaviour: Fixed costs - costs which don't change as the activity level changes Variable costs - costs which change in direct proportion to changes in the activity level Semi-variable costs- costs which have both fixed and variable elements. Explain the purpose classifying costs into the behavior patterns. D.
Fixed costs are expenses that ______________________________ . A. vary in response to changes in activity level B. remain constant on a per-unit basis C. increase on a per-unit basis as activity increases D. remain constant as activity changes
Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
Match the type of cost shown in the left column with the corresponding description shown in the right column, choosing the appropriate letter in the drop-down list. Question content area bottom Part 1 1. Irrelevant cost A. A cost that has not yet been incurred but which must, under some contract or obligation, be incurred. 2. Future outlay cost B. A cost that is not pertinent to a particular decision. 3. Opportunity cost C. A cost that involves the spending of money or some other transfer of assets. 4. Sunk cost D. A cost which has been incurred in the past. 5. Committed cost E. The cost incurred when one course of action prevents some benefit occurring from another course of action.
Which of the following correctly describes the term cost driver? a. The inflation rate which causes costs to rise b. The primary factor which is correlated with the amount of cost incurred to produce a product c. The initial purchase price of direct materials d. The total material, labor, and overhead cost of a completed job
Case 1-26 (Algo) Cost Classification and Cost Behavior [LO1-1, LO1-2, LO1-3, LO1-4] The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 4,100 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 104,000 $ 66,000 $ 22,000 $ 58,000 6,000 2,000 $ $ 12,000 $ 16,000 $ 102,000 $ Required 1 Required 2 Required 3 3,000 $ 106,000 $ 434,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two…
Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…
which one is correct please confirm? QUESTION 12 Raw material and direct labor costs are examples of ____. a. fixed costs b. variable costs c. capital costs d. overhead costs
Q1 What process is used to assign costs in an ABC system? Provide numerical example. Q2 How is relevant quantitative and qualitative information used in special order decisions? Explain and analyze using numerical example. Cost Accounting
Tracking the cost of product is belong to the cost accounting Select one: O True O False Pre am Jump to... Return to: General
Fixed overhead costs that will continue regardless of a make-or-buy decision are ________ to the make-or-buy decision. a-relevant b-irrelevant c-incremental costs d-differential costs e-opportunity costs
production. Which one of the following is likely to be a cost driver? Select one: Oa. Machine hours Ob. None of the given answers Oc. depreciation. Od. Retail price O e. Monthly rent. ESET NOD32 A Your system is expos click on this notificat Wers to Ch3 Pau ScrLk NmLk PrtSc Thinklantage Bre SysRq