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: $ 85,000 $ 43,000 $ 21,400 32,800 $ 54,200 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 $ 15,200 24,400 $ 39,600 $ 5,600 28, 200 $ 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?

Answer 1

1a.
Direct material	$85,000
Direct labor	43,000
Total manufacturing overhead	54,200
Total product costs	$182,200
1b.
Total selling expense	$39,600
Total administrative expense	33,800
Total period costs	$73,400

2a.
Direct material	$85,000
Direct labor	43,000
Total direct manufacturing cost	$128,000
2b.
Variable manufacturing overhead	$21,400
Fixed manufacturing overhead	32,800
Total indirect manufacturing cost	$54,200

3a.
Direct material	$85,000
Direct labor	43,000
Total manufacturing overhead	54,200
Total manufacturing costs	$182,200
3b.
Total selling expense	$39,600
Total administrative expense	33,800
Total nonmanufacturing costs	$73,400
3c.
Direct labor	$43,000
Total manufacturing overhead	54,200
Total conversion cost	$97,200
3d.
Direct material	$85,000
Direct labor	43,000
Total prime cost	$128,000

4a.
Direct material	$85,000
Direct labor	43,000
Variable manufacturing overhead	21,400
Total variable manufacturing cost	$149,400
4b.
Fixed manufacturing overhead	$32,800
Fixed selling expense	24,400
Fixed administrative expense	28,200
Total fixed costs	$85,400
4c.
Total variable manufacturing costs	$149,400
Variable selling expense	15,200
Variable administrative expense	5,600
Total variable cost	$170,200
Units produced and sold	1,000
Variable cost per unit produced and sold ($157,000/1,000)	$170.2

5a. Incremental cost per unit produced = $149,400/1,000 = $149.4