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    This document contains 4 problems related to cost accounting. Problem 1 asks to calculate the total cost of conducting a charity bingo fundraiser over a week. Problem 2 asks to calculate the estimated total cost of training horses using two different cost drivers and determine the best cost driver. Problem 3 asks to calculate overhead costs using high-low and linear regression methods. Problem 4 asks to calculate total costs for different patient volumes and determine if the same methodology can be used for higher volumes.

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    This document contains 4 problems related to cost accounting. Problem 1 asks to calculate the total cost of conducting a charity bingo fundraiser over a week. Problem 2 asks to calculate the estimated total cost of training horses using two different cost drivers and determine the best cost driver. Problem 3 asks to calculate overhead costs using high-low and linear regression methods. Problem 4 asks to calculate total costs for different patient volumes and determine if the same methodology can be used for higher volumes.

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    This document contains 4 problems related to cost accounting. Problem 1 asks to calculate the total cost of conducting a charity bingo fundraiser over a week. Problem 2 asks to calculate the estimated total cost of training horses using two different cost drivers and determine the best cost driver. Problem 3 asks to calculate overhead costs using high-low and linear regression methods. Problem 4 asks to calculate total costs for different patient volumes and determine if the same methodology can be used for higher volumes.

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    Download as PDF, TXT or read online from Scribd
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    90 views2 pages

    File PDF

    Uploaded by

    Ratchel Altoveros
    This document contains 4 problems related to cost accounting. Problem 1 asks to calculate the total cost of conducting a charity bingo fundraiser over a week. Problem 2 asks to calculate the estimated total cost of training horses using two different cost drivers and determine the best cost driver. Problem 3 asks to calculate overhead costs using high-low and linear regression methods. Problem 4 asks to calculate total costs for different patient volumes and determine if the same methodology can be used for higher volumes.

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    of 2

    Ateneo de Zamboanga University Acctg 314 – Management Accounting, Part 1

    School of Management and Accountancy Long Exam No. 1


    Accountancy Department August 9, 2018

    Name: _______________________________________________ ID No. _________________ Score: ______

    Problems. Read each of the problems/cases below. Solve for what is/are required. Round off
    final answers to the nearest centavo, or two decimal places.

    PROBLEM 1. A charitable institution wants to rent a hall for P3,000 a day to hold a Bingo
    fundraiser. Every session of bingo requires a caller for P200. There are supplies needed that cost
    P3 per player. On an average, each bingo player spends P20 and 1,000 people attend each
    session. P10,000 in prizes are awarded each session. If the charitable institution conducts 12
    sessions per day and 1,000 people attend each session, determine the total cost of conducting
    the fundraiser for a week, assuming that the institution holds the activity every day from Monday
    to Friday. (5 pts.)

    PROBLEM 2. Pam’s Stables used two different independent variables (trainer's hours and
    number of horses) in two different equations to evaluate the cost of training horses. The most
    recent results of the two regressions are as follows:
    Trainer's hours:
    Variable Coefficient Standard Error t-Value
    Constant 913.32 198.12 4.61
    Independent Variable 20.90 2.94 7.11
    r2 = 0.56
    Number of horses:
    Variable Coefficient Standard Error t-Value
    Constant 4,764.50 1,073.09 4.44
    Independent Variable 864.98 247.14 3.50
    r2 = 0.63
    REQUIRED:
    A. Compute for the estimated total cost for the coming year if (a) 18,000 trainer hours are
    incurred and (b) the stable has 700 horses to be trained? (10 pts.)
    B. Based on the above information, which cost driver is the best to be used for estimating
    the total cost for training horses. Discuss. (5 pts.)

    PROBLEM 3. Managers in the Stamping Department have been studying overhead cost and the
    relationship with machine hours. Data from the most recent 12 months follow.
    Overhea Machine Overhea Machine
    Month d Hours Month d Hours
    January P 5,030 2,730 July P 6,230 3,364
    February 1,600 600 August 5,570 2,411
    March 7,210 3,403 Septem 7,728 3,960
    ber
    April 4,560 2,200 October 5,810 2,897
    May 6,880 3,411 Novemb 4,580 2,207
    er
    June 6,520 2,586 Decemb 6,010 2,864
    er
    REQUIRED:
    A. Assuming that the Stamping Department normally runs its machine for 600 to 4,000
    hours per month, calculate the cost of overhead for 3,450 machine hours using High-
    Low Method. (5 pts.)
    B. Assuming that employees conducted a massive strike last February which caused the
    operation to temporarily stop for about half a month, calculate the cost of overhead for
    3,000 machine hours using Linear Regression Analysis. (5 pts.)

    PROBLEM 4. The Vaztu Zhiyan Medical Center offers a number of specialized medical services.
    A review of data for the year just ended revealed variable costs of P32 per patient day, annual
    fixed costs of P480,000, and semivariable costs, which displayed the following behavior at the
    "peak" and "valley" of activity:
    January (2,400 patient days): P258,400
    August (2,900 patient days): P278,900
    REQUIRED:
    A. Calculate the total cost for an upcoming month (2,800 patient days) if current cost
    behavior patterns continue. (5 pts.)
    B. There is a high probability that Vaztu Zhiyan's volume will increase in forthcoming
    months as patients take advantage of new scientific advances. Assume that a
    minimum operation of 3,800 patient days are considered for the next few months, can
    the data and methodology used in Req. A be used to estimate the cost for next few
    months? If so, estimate the minimum total cost expected for this level of activity. If not,
    discuss the logic behind your disagreement. (5 pts.)

    -----NOTHING FOLLOWS-----

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