This is all the information I have for this question. Assignments: SP18: INT X)
ID: 2604560 • Letter: T
Question
This is all the information I have for this question.
Assignments: SP18: INT X) a Connect d Secure ! https://newconnect.mheducation.com/flow/connect.html esearch Tutors! Chegg.c × () How do l take ×A × screens : Chapter 1 Homework Saved Help Save & Exit Submit Check my work 1ng Miller Company's total sales are $126,000. The company's direct labor cost is $15120, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $18,900 and its only variable selling and administrative expense is a sales commission of 5% of sales. The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs 3.5 points Required 1. What is the total manufacturing overhead cost? 2. What is the total direct materials cost? 3. What is the total manufacturing cost? 4. What is the total variable selling and administrative cost? 5. What is the total variable cost? 6. What is the total fixed cost? 7. What is the total contribution margin? eBook Print 1. Total manufacturing overhead cost 2. Total direct materials cost 3. Total manufacturing cost 4. Total variable selling and administrative cost 5. Total variable cost 6. Total fxed cost 7. Total contribution margin Graw Hill O Type here to search 2-53 PM 1/16/2018Explanation / Answer
Analysis of the question:
Total sales
126000
Direct Material
22680
=Prime cost- Direct labor cost
Direct Labor cost
15120
given
Prime cost
37800
=15120/0.40
Manufacturing overhead
35280
=Conversion cost- Direct labor cost
Conversion cost
50400
=15120/0.30
Selling and admin exp.
18900
given
Sell commission
6300
5% of sales
SOLUTION:
1. Manufacturing Overhead cost:
Manufacturing overhead cost is not given. But the Direct labor is given as $15120 and Conversion cost can be derived from direct labor. Conversion cost is 1/30% of Direct labor = 50,400 as calculated above.
Conversion cost = Direct Labor + Manufacturing Overhead
Manufacturing Overhead = Conversion cost - Direct Labor = 50000-15000 =$35280
2. Direct Material Cost
Prime cost is derived as 1/40% of Labor cost, i.e. 37800.
Direct Labor cost is given as 15120
Prime cost = Direct Material + Direct Labor
Or Direct Material = Prime cost - Direct Labor = 37800 -15120 = $22680
3. Total manufacturing cost
Direct material + Direct Labor + Manufacturing overheads = Total Manufacturing cost
22680 + 15120 + 35280 = $73080
4. Variable selling and admin cost
The only variable selling and administrative expense is a sales commission of 5% of sales.
Sales is given as $126,000
So Variable selling and admin cost = 126,000*5% = $6300
5. Variable cost = (DM +Direct labor +Variable admin OH) = 22680+15120+6300= $43,500
6.
Fixed Cost The manufacturing overheads are entirely fixed = 35280 as calculated above Total Admin and selling expenses is $18,900 out of which sales commission of $6,300 is variable So the
Fixed admin cost = 18900- 6300 = $12,600 Hence, Total Fixed cost = $35280 +12600 = $47,880
7.
Contribution Margin: = Contribution/ Sales X100
Contribution = Sales - Variable cost Sales
Variable cost = (DM +DL +Variable admin OH)= 22680+15120+6300= $43,500
Contribution= 126,000 -44100 = 81900
Contribution margin = 81900/126000 X100= 65%
PLEASE RATE or if you have any query please comment before providing negative feedback
Total sales
126000
Direct Material
22680
=Prime cost- Direct labor cost
Direct Labor cost
15120
given
Prime cost
37800
=15120/0.40
Manufacturing overhead
35280
=Conversion cost- Direct labor cost
Conversion cost
50400
=15120/0.30
Selling and admin exp.
18900
given
Sell commission
6300
5% of sales
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.