Dozier Company produced and sold 1,000 units during its first month of operation
ID: 2328984 • 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:
Direct materials $ 85,000
Direct labor $ 43,000
Variable manufacturing overhead $ 21,400
Fixed manufacturing overhead 32,800
Total manufacturing overhead $ 54,200
Variable selling expense $ 15,200
Fixed selling expense 24,400
Total selling expense $ 39,600
Variable administrative expense $ 5,600
Fixed administrative expense 28,200
Total administrative expense $ 33,800
Required:
1. With respect to cost classifications for preparing financial statements: a. What is the total product cost? b. What is the total period cost?
2. With respect to cost classifications for assigning costs to cost objects: a. What is total direct manufacturing cost? b. What is the total indirect manufacturing cost?
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?
4. With respect to cost classifications for predicting cost behavior: a. What is the total variable manufacturing cost? b. What is the total fixed cost for the company as a whole? c. What is the variable cost per unit produced and sold?
5. With respect to cost classifications for decision making: a. If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?
Explanation / Answer
1)Total product cost =Direct material + direct labor + total manufacturing overhead
= 85000+43000+54200
= 182200
Total period cost =selling cost+ administration cost
= 39600+33800
= 73400
2)total direct manufacturing cost = Direct material + direct labor
= 85000+43000
= 128000
total indirect manufacturing cost = variable manufacturing overhead+ fixed manufacturing overhead
= 21400+32800
= 54200
3)a total manufacturing cost = Direct material + direct labor + total manufacturing overhead
= 85000+43000+54200
= 182200
total nonmanufacturing cost= selling cost+ administration cost
= 39600+33800
= 73400
c)conversion cost =direct labor +total overhead
= 43000+54200
= 97200
prime cost = direct material +direct labor
= 85000+43000
= 128000
4)total variable manufacturing cost =direct material +direct labor+variable manufacturing overhead
= 85000+43000+21400
= 149400
total fixed cost for the company as a whole = fixed manufacturing overhead+ fixed selling +fixed administration
= 32800+24400+28200
= 85400
c)Total variable cost= variable manufacturing cost + variable selling +variable administration
= 149400+15200+5600
= 170200
variable cost per unit produced and sold = 170200/1000 = $ 170.2 per unit
5)variable manufacturing cost per unit = Total variable manufacturing cost /number of unit
= 149400/1000
= $ 149.40 per unit
incremental manufacturing cost would it have incurred to make the additional unit = 1* 149.4 = $ 149.4
since fixed cost remain constant whether additional unit is produced or not so it is irrelevant.
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