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L15.2030 - Cost Accounting (2025/2026)

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Company X has three products, A, B, and C. The following information is

available:

Product A

Product B

Product C

Sales

$60000​

$98000​

$23000​

Variable costs

38000

53000

12000​

Contribution

margin

22000​

45000​

11000​

Fixed costs:

       Avoidable

6000​

19000​

7310​

       Unavoidable

11000

12000

9400​

Operating income

5000

14000

-5710

Assuming Company X drops Product C and does NOT

replace it, operating income will:

0%
0%
0%
0%
0%
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Company X produces and sells product A for $85 per unit. The following information is available:

  • Production: 100000 units
  • Sales: 80000 units
  • Direct material: $20 per unit
  • Direct labour: $5 per unit
  • Variable manufacturing costs: $3 per unit
  • Fixed manufacturing costs: $800000 per year
What is the inventoriable cost per unit using absorption costing?
0%
0%
0%
0%
0%
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Company X is interested in using the reciprocal allocation method.

The following data from operations were collected for analysis:

Budgeted

manufacturing overhead costs:

M

Support Dept

$320000

P

Support Dept

$219041

W

Operating Dept

$680000

C

Operating Dept

$360000

Services

furnished:

 

To

M

To

P

To

W

To

C

By

M (bdgt labor-hours)

-

1

600

7

200

4

700

By

P (Nr. of employees)

11

-

38

28

What

is the complete reciprocated cost of Department P?

0%
0%
0%
0%
0%
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The following information is available for Company X:

  • Variable costs = $200000
  • variable cost per unit = $20/unit
  • Fixed costs = $100000
  • Operating income before taxes = $200000

What will be the operating income if the company sells an additional amount of 5807 units?

0%
0%
0%
0%
0%
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Company X processes wood to obtain two products, B and C. The following information was collected for

the month of December:

  • Production and sales of B: 13000 tons
  • Production and sales of C: 17000 tons
  • Selling price of B: $2.00 per ton
  • Selling price of C: $5.50 per ton
  • Separable costs of B: $15658
  • Separable costs of C: $34900

The

costs of purchasing wood and processing it up to the

split-off point to yield a total of 30000 tons of saleable product was $52175.

The

company uses NRV method to allocate joint costs.

How much is the gross

margin of C for the month under analysis?

0%
0%
0%
0%
0%
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Company X uses machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the jobs and presented the following information about the company:

  • Direct materials: $50000
  • Direct labour: $10000
  • Manufacturing overhead costs: $30000
  • Machine hours: 10000

Additionaly, company X provided information about Job 301:

  • Direct materials: $ 300
  • Direct labour: $ 283

What are the total manufacturing costs of this job, assuming that Job 301 used 300 machine-hours?

0%
0%
0%
0%
0%
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The breakeven point decreases if:
0%
0%
0%
0%
0%
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Which of the following statements is always true of process costing?
0%
0%
0%
0%
0%
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Assume you are a second-year student in college and are committed to earning an undergraduate degree. Your current decision is whether to finish college in three consecutive years or take a year off and work for some extra cash.

a) Identify two revenues or costs that are relevant to making this decision. Explain why each is relevant.

b) Identify two costs that would be considered sunk costs for this decision.

c) Identify two opportunity costs for this decision.

(max 200 words)

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Company X manufactures two models of jacuzzis, a standard and a deluxe model. The following activity and cost information has been compiled:

Number ofNumber ofNumber of
ProductSetupsComponentsDirect Labor Hours
Standard330650
Deluxe750150
Overhead costs$40,000$120,000

Explain, from a theoretical perspective, the difference between the costs obtained from the traditional costing system (OH costs applied based on DL hours) and the ABC system (OH costs applied based on the number of setups and number of components are identified as the activity-cost drivers). Which system provides a better estimate of costs? Why?

(max 200 words - NO NEED TO DO / TO PRESENT ANY CALCULATIONS)

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