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 $ 76,000 Direct labor $ 38,500 Variable manufacturing overhead $ 17,800 Fixed manufacturing overhead 30,100 Total manufacturing overhead $ 47,900 Variable selling expense $ 13,400 Fixed selling expense 20,800 Total selling expense $ 34,200 Variable administrative expense $ 4,700 Fixed administrative expense 26,400 Total administrative expense $ 31,100 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

1)	total product cost				162,400	answer
	total period cost				65300	answer
	total product cost
	Direct materials				76,000
	direct labor				38,500
	total manufacturing overhead				47,900
	total product cost				162,400
	total period cost
	total selling expense				34,200
	total administrative expense				31,100
	total period cost				65,300
2)	total direct manufacturing cost				114,500	answer
	total indirect manufacturing cost				47900	answer
	total direct manufacturing cost
	direct materials				76,000
	direct labor				38,500
	total direct manufacturing cost				114,500
	total indirect manufacturing cost
	Variable manufacturing overhead				17,800
	fixed manufacturing overhead				30,100
	total indirect manufacturing cost				47,900
3a)	Total manufacturing cost
	Direct materials					76,000
	direct labor					38,500
	Manufacturing overhead
	Variable manufacturing overhead				17,800
	fixed manufacturing overhead				30,100	47,900
	total manufacturing cost					162,400	answer
b)	total nonmanufacturing cost
	total selling expense					34,200
	total administrative expense					31,100
	total non manufacturing cost					65,300	answer
c)	conversion cost
	direct labor					38,500
	Manufacturing overhead
	Variable manufacturing overhead				17,800
	fixed manufacturing overhead				30,100	47,900
	conversion cost					86,400	answer
	prime cost
	Direct materials					76,000
	direct labor					38,500
	prime cost					114,500	answer
4)	total variable manufacturing cost					132,300	answer
	total fixed cost					73,100	answer
	variable cost per unit produced and sold					148	answer	(rounded off)
	total manufacturing cost
	direct materials					76,000
	direct labor					38,500
	variable manufacturing overhead					17,800
	total variable manufacturing cost					132,300
	fixed manufacturing overhead					30,100
	fixed selling expense					18,000
	fixed administrative expense					25,000
	total fixed cost					73,100
	variable cost per unit produced and sold
	direct materials					76,000
	direct labor					38,500
	variable manufacturing overhead					17,800
	variable selling expense					12,000
	variable administrative expense					4,000
	total variable cost (a)					148,300
	number of units produced and sold (b)					1,000
	variable cost per unit produced and sold					148
5)	incremental cost per unit produced					132	answer