Acc346 Managerial Accounting: Week 1 Homework (E1-10, E1-11, P2-1)

Acc346 Managerial Accounting
Week 1 Homework (E1-10, E1-11, P2-1)

EXERCISE 1-10. Cost Terms
Identify each of the following statements with fixed costs or variable costs by writing “fixed” or “variable” in the space provided.
__________ a. A cost that varies in total with changes in the activity level.
__________ b. A cost that varies on a per-unit basis with changes in the activity level.
__________ c. A cost that remains fixed per unit with changes in the activity level.
__________ d. A cost that remains fixed in total with changes in the activity level.

EXERCISE 1-11. Cost Terms
Indicate whether each of the following costs is most likely a fixed cost or a variable cost by writing “fixed” or “variable” in the space provided.
__________ a. Assembly labor.
__________ b. The cost of material used in production.
__________ c. Rent.
__________ d. Depreciation.
__________ e. Fuel cost at an airline.

PROBLEM 2-1. Cost of Goods Manufactured, Cost of Goods Sold, and Income
The following information is available for Satterfield’s Custom Glass for the fiscal year ending December 31, 2011.
Beginning balance in Work in Process 200,000
Ending balance in Work in Process 300,000
Beginning balance in Finished Goods 500,000
Ending balance in Finished Goods 400,000
Direct material cost 2,000,000
Direct labor cost 2,400,000
Manufacturing overhead 1,700,000
Selling expenses 250,000
General and administrative expenses 450,000
Sales 8,000,000

Required
a. Prepare a schedule of cost of goods manufactured.
b. Prepare an income statement for fiscal 2011. Ignore income taxes.
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