Chapter no.9
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This document contains examples and exercises related to cost accounting. It includes schedules showing standard and actual production outputs, labor costs, and unit costs for various time periods. It also includes examples calculating learning curves to estimate total costs for increasing batch or cumulative quantities based on a learning curve coefficient of 0.8.
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Chapter no.9
- 1. COST ACCOUNTING 9TH EDITION 61 Exercises Exercise 1 Days Hours Standard out put per Hour Standard out per day actual out put per day Efficiency Ratio Hourly Rate Efficiency Rate Daily Earnings Cost per Unit Monday 8 30 240 270 1.13 9 10.125 81 0.3 Tuesday 8 30 240 230 9 0 72 0.313043478 Wednesday 8 30 240 300 1.25 9 11.25 90 0.3 Thursday 8 30 240 240 1.00 9 9 72 0.3 Friday 8 30 240 260 1.08 9 9.75 78 0.3 Weekly earnings 1300 393 Or Hours Worked 8*5 40 Units Produced 1300 Standard Production 1200 Efficiency Ratio 1.083333 Base Wage 9 Weekly earnings 390 9*40*1.08 Effective Hourly rate 9.75 Labor Cost per unit 0.3 Exercise 2 Units Produced Standard Hoursfor units producedActualHours Regular GroupWage Bonus(Hrs Saved@8$) TotalGroup Earnings LaborCost PerUnit Depreciation OtherFOH TotalFOH FOHCost PerUnit Conversion Cost Conversion CostperUnit a b c d e f g h I j k l m a/50 10 x8 10x8x8 f/a 10*8 8*7 j +f l/a Monday 3800 76 80 640 0 640 0.17 80 56 136 0.035789 776 0.20 Tuesday 4500 90 80 640 80 720 0.16 80 56 136 0.030222 776 0.17 Wednesday 4600 92 80 640 96 736 0.16 80 56 136 0.029565 776 0.17 Thursday 4500 90 80 640 80 720 0.16 80 56 136 0.030222 776 0.17 Friday 4400 88 80 640 64 704 0.16 80 56 136 0.030909 776 0.18 21800 3200 320 3520 280 680 3880
- 2. COST ACCOUNTING 9TH EDITION 62 Or Dove Plains Inc. Schedule of Labor Costs Monday Tuesday Wednesday Thursday Friday Units Produced 3800 4500 4600 4500 4400 Standard Hours for production 76 90 92 90 88 Actual Hours 80 80 80 80 80 Daily group wage 640 640 640 640 640 Bonus 80 96 80 64 total Labor Cost 640 720 736 720 704 Unit Labor Cost 0.1684211 0.16 0.16 0.16 0.16 Unit Overhead Cost 0.0357895 0.0302222 0.029565 0.03022222 0.03091 Unit Conversion Cost 0.2042105 0.1902222 0.189565 0.19022222 0.19091 Exercise 3 Standard production per hour 20 units Hours in a day 8 Wage Rate $8/Hour 1 Units actual hrs Std hrs hrs saved 80% @ $8 reg wage total wage Cost/Unit a b c d e f g h a/20 c-b Monday 160 8 8 0 0 64 64 0.4 Tuesday 170 8 8.5 0.5 3.2 64 67.2 0.395294 Wednesday 175 8 8.75 0.75 4.8 64 68.8 0.393143 505 200 2 Actual Production 840 units Standard Production 20*40 800 Units efficiency ration 1.05 Base rate 8 effective rate 8.4 Effective wages 336 Unit cost 0.4 3 1 Units actual hrs Std hrs effective rate Wages Cost/unit a b c a/20 Monday 160 8 8 8 64 0.4 Tuesday 168 8 8.4 8.4 67.2 0.4 Wednesday 175 8 8.75 8.4 67.2 0.384 503 198.4
- 3. COST ACCOUNTING 9TH EDITION 63 Rate per Unit 0.394433 Exercise 4 Employee Hr rate hrs total wages Clancy, D 6 40 240 Luken.T 8 40 320 Schott.J 7 40 280 Total Wages existing plan 840 Production 165 Units Employee base rate hrs total wages Clancy, D 3.5 40 140 Luken.T 5.5 40 220 Schott.J 4.5 40 180 wages 540 Bonus 165*1*3 495 Total Wage & Premium 1035 Difference in Bonus plan and Existing Plan=1035- 840= 195 Difference in present and proposed output=165-150= 15 Dollar amount of 23.2%= 195/840 23.21429 % He is correct in his opinion as with the rise in units the wage cost is increasing Essential of effective wage plan is that it should increase the wages of employees not at the cost of production Exercise 5 Batch Cumulativ eAverage required costper batch Learning curve estimated totalcost neededto produced the batches 1 30000 30000 2 24000 0.8 48000 4 19200 0.8 76800 8 15360 0.8 122880 16 12288 0.8 196608
- 4. COST ACCOUNTING 9TH EDITION 64 Exercise 6 Bridges Cumulative Average required week to prepare Learning curve estimated total weeks needed to produced the bridges 1 100 100 2 80 0.8 160 4 64 0.8 256 8 51.2 0.8 409.6 Exercise 8 Department BudgetedHours ActualLabor Cost UnitsProduced CostPerHour CostperUnit ActualHrperunit StdHrsperUnits StdCostperHr Stdrateperunit StandardLabor Cost Variance Mixing 1,100 9,798 740 9 13 1 2 9 14 10,157 359 Processing 3,320 28,275 615 9 46 5 5 10 49 29,981 1,706 Packaging 580 3,816 800 7 5 1 1 9 5 3,600 (216) Exercise 7 Bridges Cumulative Average requiredweek toprepare Learningcurve estimatedtotal weeksneeded toproduced thebridges 1 810 810 2 648 0.8 1296 4 518.4 0.8 2073.6 8 414.72 0.8 3317.76