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 $ 73,000 Direct labor $ 37,000 Variable...

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 $ 73,000 Direct labor $ 37,000 Variable manufacturing overhead $ 16,600 Fixed manufacturing overhead 29,200 Total manufacturing overhead $ 45,800 Variable selling expense $ 12,800 Fixed selling expense 19,600 Total selling expense $ 32,400 Variable administrative expense $ 4,400 Fixed administrative expense 25,800 Total administrative expense $ 30,200 

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? (Round your answer to the nearest whole dollar amount.) 

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? (Round your answer to the nearest whole dollar amount.)


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Answer #1

Solution 1a) Calculation of Total Product Cost

Total $ (1000 Units)

Per Unit

Direct materials

                              73,000.00

                          73.00

Direct labor

                              37,000.00

                          37.00

Variable manufacturing overhead

                              16,600.00

                          16.60

Fixed manufacturing overhead

                              29,200.00

                          29.20

Total

                           1,55,800.00

                        155.80

Solution 1b) Calculation of Total Period Cost

Total $ (1000 Units)

Per Unit

Variable selling expense

12800.00

                          12.80

Fixed selling expense

19600.00

                          19.60

Variable administrative expense

4400.00

                            4.40

Fixed administrative expense

25800.00

                          25.80

Total

                              62,600.00

                          62.60

Solution 2a) Total Direct Manufacturing Cost

Total $ (1000 Units)

Per Unit

Direct materials

73000.00

                          73.00

Direct labor

37000.00

                          37.00

Total

110000.00

                        110.00

2b) Total Indirect Manufacturing cost

Total $ (1000 Units)

Per Unit

Variable manufacturing overhead

16600.00

                          16.60

Fixed manufacturing overhead

29200.00

                          29.20

Total

45800.00

                          45.80

Solution 3a) Total Manufacturing Cost

Total $ (1000 Units)

Per Unit

Direct materials

                              73,000.00

                          73.00

Direct labor

                              37,000.00

                          37.00

Variable manufacturing overhead

                              16,600.00

                          16.60

Fixed manufacturing overhead

                              29,200.00

                          29.20

Total

                           1,55,800.00

                        155.80

Soluton 3b) Total Non Manufacturing Cost

Total $ (1000 Units)

Per Unit

Variable selling expense

                              12,800.00

                          12.80

Fixed selling expense

                              19,600.00

                          19.60

Variable administrative expense

                                 4,400.00

                            4.40

Fixed administrative expense

                              25,800.00

                          25.80

Total

                              62,600.00

                          62.60

Solution 3c) Total Conversion Cost

Total $ (1000 Units)

Per Unit

Direct labor

                              37,000.00

                          37.00

Variable manufacturing overhead

                              16,600.00

                          16.60

Fixed manufacturing overhead

                              29,200.00

                          29.20

Total

                              82,800.00

                          82.80

Solution 3c) Prime Cost

Total $ (1000 Units)

Per Unit

Direct materials

73000.00

                          73.00

Direct labor

37000.00

                          37.00

Total

110000.00

                        110.00

Solution 4a) Total Variable Manufacturing cost

Total $ (1000 Units)

Per Unit

Direct materials

                              73,000.00

                          73.00

Direct labor

                              37,000.00

                          37.00

Variable manufacturing overhead

                              16,600.00

                          16.60

Total

                           1,26,600.00

                        126.60

Solution 4b) Total Fixed Cost

Total $ (1000 Units)

Per Unit

Fixed manufacturing overhead

                              29,200.00

                          29.20

Fixed selling expense

                              19,600.00

                          19.60

Fixed administrative expense

                              25,800.00

                          25.80

Total

                              74,600.00

                          74.60

Solution 4C) Variable Cost per Unit of unit produced

Total $ (1000 Units)

Per Unit

Direct materials

73000.00

                          73.00

Direct labor

37000.00

                          37.00

Variable manufacturing overhead

16600.00

                          16.60

Variable administrative expense

4400.00

                            4.40

Total

131000.00

                        131.00

Solution 4C) Variable Cost per Unit of unit sold

Total $ (1000 Units)

Per Unit

Direct materials

73000.00

                          73.00

Direct labor

37000.00

                          37.00

Variable manufacturing overhead

16600.00

                          16.60

Variable administrative expense

4400.00

                            4.40

Variable selling expense

12800.00

                          12.80

Total

143800.00

                      143.80

Solution 5) Incremental Cost of manufacturing additional

Per Unit $

Direct materials

                          73.00

Direct labor

                          37.00

Variable manufacturing overhead

                          16.60

Variable administrative expense

                            4.40

                        131.00

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