Dozier Company produced and sold 1,000 units during its first month of operation
ID: 2336883 • 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: $ 69,0e0 $ 35,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Variable selling expense Fixed selling expense Total selling expense Variable administrative expense Fixed administrative expense Total administrative expense $ 15,0ee 28,000 $ 43,000 $ 12,0e0 18,000 $ 30,000 $ 4,000 25,000 $ 29,0e0 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
1a. Computation of total product cost
Total product cost = Direct Materials + Direct Labor + Manufacturing OH
Total product cost = 69000 + 35000 + 43000 = $147000
1b. Computation of total Period cost
Total Period cost = Selling Expense + Administrative Expense
Total Period cost = 30000 + 29000 = $59000
2a. Computation of total direct manufacturing cost
Total direct manufacturing cost = Direct Material + Direct Labor
Total direct manufacturing cost = 69000 + 35000 = $104000
2b. Computation of total Indirect manufacturing cost
Total Indirect manufacturing cost = Variable MOH + Fixed MOH
Total Indirect manufacturing cost = 15000 + 28000 = $43000
3a. Computation of total manufacturing cost
Total manufacturing cost = Direct Labor + Direct Labor + Total Manufacturing OH
Total manufacturing cost = 69000+ 35000 + 43000 = $147000
3b. Computation of total Nonmanufacturing cost
Total Nonmanufacturing cost = Selling Expense + Administrative Expense
Total Nonmanufacturing cost = 30000 + 29000 = $59000
3c. Computation of total conversion and Prime cost
Total Conversion cost = Direct Labor + Total Manufacturing OH
Total Conversion cost = 35000 + 43000 = $88000
Total Prime cost = Direct Material + Direct Labor
Total Prime cost = 69000 + 35000 = $104000
4a. Computation of total Variable Manufacturing cost
Total Variable Manufacturing cost = Direct Material + Direct Labor + Variable Manufacturing OH
Total Variable Manufacturing cost = 69000 + 35000 + 15000 = $119000
4b. Computation of total amount of fixed cost for the company as a whole
Total Fixed cost = Fixed MOH + Fixed Selling Expense + Fixed Admninistrative
Total Fixed cost = 28000 + 18000 + 25000 = $71000
4c. Computation of Variable cost per unit produced and sold
Total Variable cost = Direct Material + Direct Labor + Variable Manufacturing OH + Variable SE + Variable AE
Total Variable cost = 69000 + 35000 + 15000 + 12000 + 4000 = $135000
Variable Cost per unit = $135000 / 1000 = $135
5a. Incremental cost = Total Variable Manufacturing Cost / 1000
Incremental cost = 119000 / 1000
Incremental cost per one additional unit = $119
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