need help with question 4 The Mahela Company specializes in producing sets of wo

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need help with question 4

The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company has ample orders to keep production going at its full capacity of 3,300 sets per quarter. Quarterly cost data at full capacity follow: Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building General office supplies (billing) General office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 124,500 51,300 41,300 4,800 86,500 3,800 5,300 13,300 7,300 11,300 4,300 66,500 100,500 21,300 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. As examples, this has been done already for the first two items in the preceding list. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect as shown.) Selling and Administrative Cost Cost Behaviour Product Cost Cost Itenm Variable Fixed Direct Indirect* $ 124,500 Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building General office supplies (billing) General office salaries Direct materials used (wood, bolts, etc.) Utilities, factory Total costs S 124,500 51,300 41,300 4,800 51,300 41,300 4,800 86,500 86,500 3,800 5,300 13,300 3,800 5,300 13,300 7,300 11,300 7,300 11,300 4,300 4,300 66,500 66,500 100,500 100,500 21,300 S 344,400 197,600213,900225,000103,100 21.300

Explanation / Answer

Cost behaviour Selling and administrative cost Product Cost Cost item Variable Fixed Direct Indirect Factory labour,direct 124500 124500 Advertising 51300 51300 Factory supervision 41300 41300 property taxes,factory building 4800 4800 Sales commissions 86500 86500 Insurance,factory 3800 3800 Depreciation,office equipment 5300 5300 Lease cost,factory equipment 13300 13300 Indirect materials,factory 7300 7300 Depreciation,office building 11300 11300 General office supplies(billing) 4300 4300 General office salaries 66500 66500 Direct materials used(wood ,bolt,etc.) 100500 100500 Utilities,factory 21300 21300 Total costs 344400 197600 213900 225000 103100 Total production cost Direct Cost 225000 Indirect Cost 103100 Total production cost 328100 Number of units 3300 Production cost per unit 99.42424242 Yes, The president may expect a minimum price of 99.42

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