Dozier Company produced and sold 1,000 units during its first month of operation
ID: 2328331 • Letter: D
Question
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:
30,500
3. With respect to cost classifications for manufacturers:
a. What is the total manufacturing cost?
b. What is the total nonmanufacturing cost?
c. What is the total conversion cost and prime cost?
Direct materials $ 74,000 Direct labor $ 37,500 Variable manufacturing overhead $ 17,000 Fixed manufacturing overhead 29,500 Total manufacturing overhead $ 46,500 Variable selling expense $ 13,000 Fixed selling expense 20,000 Total selling expense $ 33,000 Variable administrative expense $ 4,500 Fixed administrative expense 26,000 Total administrative expense $30,500
Explanation / Answer
a. Calculation of total Manufacturing Cost or Product Cost:
Manufacturing Cost = Direct Material + Direct Labor + Manufacturing Overhead
Total Manufacturing Cost = $74,000 + $37,500 + $46,500 = $158,000
b. Calculation of Total Non-Manufacturing cost
Non-manufacturing costs refer to those incurred outside the factory or production department. These are costs are not needed in transforming materials into finished goods. Non-manufacturing costs include: selling expenses and general expenses.
Therefore.
Non-Mnufacturing Cost = Selling expenses + General and Administrative Expenses
Total Non- Manufacturing Cost = $33,000 + $30,500 = $63,500
c. Calcultion of total conversion cost and prime cost
Total Conversion Cost : Conversion costs are the manufacturing costs needed to convert the direct materials into products.
Total Conversion Cost = Direct Labor Cost + Manufacturig or Factory Overhead Cost
Direct Labor Cost = $37,500
Factory Overhead Cost = Variable manufacturing overhead + Fixed manufacturing overhead
Factory Overhead Cost = $17,000 + $29,500 = $46,500
Therefore,
Total Conversion Cost = Direct Labor Cost + Manufacturig or Factory Overhead Cost
Total Conversion Cost = $37,500 + $46,500 = $84,000
Prime Cost: Prime cost is the direct cost of manufacturing an item. Prime cost includes Direct Material and Direct Labor.
Prime Cost = Direct Material + Direct Labor = $74,000 + $37,500 = $111,500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.