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: $ 83,000 S 42,000 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 $ 20,600 32,200 $ 52,800 S 14, 800 23, 600 s 38,400 S 5, 400 27,800 $ 33, 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? 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

Solution:
1a.	Total product cost	177,800
1b.	Total period cost	71,600
Working Notes:
	Total product cost
	Direct materials	83,000	A
	Direct labor	42,000	B
	Total manufacturing overhead	52,800	C
	Total product cost	177,800	D=A+B+C
	Total period cost
	Total selling expense	38,400	A
	Total administrative expense	33,200	B
	Total period cost	71,600	C =A + B
2a.	Total Direct manufacturing cost	125,000
2b.	Total Indirect manufacturing cost	52,800
Working Notes:
	Total Direct manufacturing cost
	Direct materials	83,000	A
	Direct labor	42,000	B
	Total Direct manufacturing cost	125,000	C=A+B
	Total Indirect manufacturing cost
	Variable manufacturing overhead	20,600	A
	Fixed manufacturing overhead	32,200	B
	Total Indirect manufacturing cost	52,800	C=A+B
3a.	Total manufacturing cost	177,800
3b.	Total nonmanufacturing cost	71,600
3c.	Total conversion cost	94,800
	Total prime cost	125,000
Working Notes:
	Total manufacturing cost
	Direct materials	83,000	A
	Direct labor	42,000	B
	Total manufacturing overhead	52,800	C
	Total manufacturing cost	177,800	D=A+B+C
	Total non manufacturing cost
	Total selling expense	38,400	A
	Total administrative expense	33,200	B
	Total nonmanufacturing cost	71,600	C =A + B
	Total conversion cost
	Direct labor	42,000	A
	Total manufacturing overhead	52,800	B
	Total conversion cost	94,800	C =A + B
	Total prime cost
	Direct materials	83,000	A
	Direct labor	42,000	B
	Total prime cost	125,000	C =A + B
4a.	Total variable manufacturing cost	145,600
4b.	Total fixed cost	83,600
4c.	Variable cost per unit produced and sold	166
Working Notes:
	Total variable manufacturing cost
	Direct materials	83,000	A
	Direct labor	42,000	B
	Variable manufacturing overhead	20,600	C
	Total variable manufacturing cost	145,600	D=A+B+C
	Total fixed cost
	Fixed manufacturing overhead	32,200	A
	Fixed selling expense	23,600	B
	Fixed administrative expense	27,800	C
	Total fixed cost	83,600	D=A+B+C
	Variable cost per unit produced and sold
	Direct materials	83,000	A
	Direct labor	42,000	B
	Variable manufacturing overhead	20,600	C
	Variable selling expense	14,800	D
	Variable administrative expense	5,400	E
	Total variable cost	165,800	F=A+B+C+D+E
	Number of units produced and sold	1000	G
	Variable cost per unit produced and sold	165.8	H = F ÷ G
		166
5a.	Incremental cost per unit produced	146
Working Notes:
	Direct materials	83,000	A
	Direct labor	42,000	B
	Variable manufacturing overhead	20,600	C
	Total incremental cost	145,600	D=A+B+C
	Number of units produced and sold	1,000	E
	Incremental cost per unit produced	145.6	F = D ÷ E
	So for additional 1 unit cost per unit	146
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