Question

The following data is available for Crater Corporation's North American division for the years 2014 and 2015. During these years there were no inventories in the system. 2015 55,000 13,400 $ 24,700,000 2014 59.000 12,500 $ 26,140,000 Production quantity Number of customers Revenues Expenses Direct materials & components Direct production wages (1) Production supervisory salaries Salaries paid to sales representatives (2) Advertising Insurance (3) Building rent (4) Other salaries (5) Honorarium to the members of the board Production quality control (6) Market research Depreciation (7) Facilities management (8) Legal Personnel department Utilities production (9) Utilities other (10) Customer service (11) $ $ $ $ $ $ $ $ $ $ $ $ 3,222,500 1,466,000 268,900 610,500 687,300 121,670 266,140 1,175,000 437,700 132,900 348,000 1,329,700 885,730 690,100 198,000 860,100 367,840 920,400 $ 3,555,700 $ 1,608,600 $ 245,600 $ 632,100 $ 580,400 $ 116,600 $ 264.300 $ 1,247,000 $ 437,700 $ 138,120 $ 304,960 $ 1,171,900 $ 747.700 $ 622,700 $ 195,700 $ 770,200 $ 309,000 $ 927,600 $ $ $ $ $ $ 13,988,480 $ 13,875,880

Answer 1

Answer-1:

Cost Items Function Sales/MKT Admin MEG $ 3,222,500 1,466,000 268,900 610,500 687,300 85,169 172,991 587,500 53,228 235,000 Cost behavior Variable Fixed $ 3,222,500 1,466,000 268,900 370,500 240,000 687,300 121,670 266,140 1,175,000 437,700 53,160 79,740 348,000 1,329,700 885,730 690,100 198,000 516,060 344,040 165,528 202,312 184,080 736,320 $5,977,828 $ 8,010,652 Direct material and componenets Direct production wages Production supervisory salaries Salaries paid to sales representatives Advertising Insurance Bulding rent Office salaries Honorarium to the member of the board Production quality control Market research Depreciation Facilities management Legal Personel department Utilities-production Utilities-other Customer service Total costs 36,501 39,921 352,500 437,700 132,900 348,000 132,970 864,305 354,292 332,425 531,438 690,100 198,000 860,100 183,920 183,920 920,400 $ 3,171,318 $ 8,014,657 $ 2,802,505

Answer-2(a):

Product cost Period cost 2015 $ 8,014,657 $ 5,973,823

Answer-2(b):

Indirect Direct $ 3,222,500 1,466,000 Product Costs Direct materials & components Direct production wages Production supervisory salaries Insurance Bulding rent Office salaries Production quality control Depreciation Facilities management Utilities-production Total 268,900 85,169 172,991 587,500 132,900 864,305 354,292 860,100 $ 3,326,157 4,688,500