Part III.
STRUCTURED LEARNING
EXERCISES
Activity 1: This activity focuses on Type
of Costing System
Activity 2: This activity focuses on
Factory Overhead Costing
Activity 3: This activity focuses on Cost
Volume Practice Analysis.
Job costing involves the following
accounting activities: Materials. It
accumulates thecost of components and then
assigns these costs to a product or project
once the components are used. Labor.
Employees charge their time to specific jobs,
which are then assigned to the jobs based on
the labor cost of the employees. Give an oral
report of this exercise in the class.
Controlling manufacturing overhead is
especially important for a small business.
Also known as indirect costs or factory
overhead, manufacturing overhead is
everything of a support nature that is needed
to help make the product. It is not the direct
materials and direct labor required to make
the actual product. Manufacturing is a highly
competitive industry, and uncontrolled
overhead expenses can eat away at profits
and increase costs. Small-business owners
can use cost accounting as a way of tracking
and reducing their manufacturing overhead
expenses. Explain the different costs under
Factory Overhead. Explain to your group
mates.
Assume that as an investor, you are
planning to enter the construction industry as
a panel formwork supplier. The potential
number of forthcoming projects, you
forecasted that within two years, your fixed
cost for producing formworks is Rs. 300,000.
The variable unit cost for making one panel is
Rs. 15. The sale price for each panel will be
Rs. 25. If you charge Rs. 25 for each panel,
how many panels you need to sell in total, in
order to start making money?