Question

Problem 1-24 Different Cost Classifications for Different Purposes (LO1-1, LO1-2, LO1-3, LO1-4, LO1-5) Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: $ 79,000 $ 40.000 $ 19,000 31,000 $ 50,000 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 $14.000 22.000 $36,000 $ 5,000 27,000 $ 32,000 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?

Answer 1

1a.
Direct material	$79,000
Direct labor	40,000
Total manufacturing overhead	50,000
Total product costs	$169,000
1b.
Total selling expense	$36,000
Total administrative expense	32,000
Total period costs	$68,000

2a.
Direct material	$79,000
Direct labor	40,000
Total direct manufacturing cost	$119,000
2b.
Variable manufacturing overhead	$19,000
Fixed manufacturing overhead	31,000
Total indirect manufacturing cost	$50,000

3a.
Direct material	$79,000
Direct labor	40,000
Total manufacturing overhead	50,000
Total manufacturing costs	$169,000
3b.
Total selling expense	$36,000
Total administrative expense	32,000
Total nonmanufacturing costs	$68,000
3c.
Direct labor	$40,000
Total manufacturing overhead	50,000
Total conversion cost	$90,000
3d.
Direct material	$79,000
Direct labor	40,000
Total prime cost	$119,000

4a.
Direct material	$79,000
Direct labor	40,000
Variable manufacturing overhead	19,000
Total variable manufacturing cost	$138,000
4b.
Fixed manufacturing overhead	$31,000
Fixed selling expense	22,000
Fixed administrative expense	27,000
Total fixed costs	$80,000
4c.
Total variable manufacturing costs	$138,000
Variable selling expense	14,000
Variable administrative expense	5,000
Total variable cost	$157,000
Units produced and sold	1,000
Variable cost per unit produced and sold ($157,000/1,000)	$157

Answer 2

Problem 1-24 Different Cost Classifications for Different Purposes [LO1-1, LO1-2, LO1-3, LO1-4, LO1-5]

Direct materials								$          80,000
Direct labor								$        40,500
Variable   manufacturing overhead							$        19,400
Fixed   manufacturing overhead							$        31,300
Total   manufacturing overhead								$        50,700
Variable   selling expense							$        14,200
Fixed selling   expens							$        22,400
Total selling   expense								$        36,600
Variable   administrative expense							$          5,100
Fixed   administrative expense							$        27,200
Total   administrative expense								$        32,300

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?

1a.   Total Product cost
Details	$
Direct   materials	80,000
Direct   labor	40,500
Variable   manufacturing cost	19,400
Fixed   Manufacturing cost	31,300
Total   Product cost	171,200
1b. Total Period cost
Details	$
Variable   selling cost	14,200
Fixed   selling cost	22,400
Variable   administrative expense	5,100
Fixed   administrative expense	27,200
Total   Product cost	68,900
2a. Total direct manufacturing cost
Details	$
Direct   materials	80,000
Direct   labor	40,500
Total   direct manufacturing cost	120,500
2b. Total Indirect manufacturing cost
Details	$
Variable   manufacturing cost	19,400
Fixed   manufacturing cost	31,300
Total   indirect manufacturing cost	50,700
3a. Total manufacturing cost
Details	$
Direct   materials	80,000
Direct   labor	40,500
Total   manufacturing overhead	50,700
Total   manufacturing cost	171,200
3b. Total non manufacturing cost
Details	$
Variable   selling cost	14,200
Fixed   selling cost	22,400
Variable   administrative expense	5,100
Fixed   administrative expense	27,200
Total   non manufacturing cost	68,900
3c. Total conversion cost
Details	$
Direct   labor	40,500
Total   manufacturing overhead	50,700
Total   conversion cost	91,200
Total Prime cost
Details	$
Direct   materials	80,000
Direct   labor	40,500
Total   Prime cost	120,500
4a. Total Variable manufacturing cost
Details	$
Direct   materials	$              80,000
Direct   labor	$              40,500
Variable   manufacturing overhead	19,400
Total   Variable manufacturing cost	139,900
4b. Total Fixed cost
Details	$
Fixed   manufacturing overhead	31,300
Fixed   selling expense	22,400
Fixed   administrative expense	27,200
Total   Fixed cost	80,900
4c. Variable cost per unit produced and sold
Details	$
Total   Variable manufacturing cost	139,900
Variable   selling expense	14,200
Variable   administrative expense	5,100
Total   Variable cost	159,200
Units   produced and sold	1,000
Variable   cost per unit = $157,200 / 1,000 units = $159.2 per   unit	159.2
5a.   Incremental manufacturing cost
Details	$
Direct   materials	80,000
Direct   labor	40,500
Variable   manufacturing overhead	19,400
Incremental   manufacturing cost	139,900
Incremental   manufacturing cost per unit = $139,900 / 1,000 units = 139.9 $ per unit	139.9