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				$	83,000
Direct labor				$	42,000
Variable manufacturing overhead	$	20,600
Fixed manufacturing overhead		32,200
Total manufacturing overhead				$	52,800
Variable selling expense	$	14,800
Fixed selling expense		23,600
Total selling expense				$	38,400
Variable administrative expense	$	5,400
Fixed administrative expense		27,800
Total administrative expense				$	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

1.

A) Total Product Cost	$177,800
B)Total Period Cost	$71,600

Explanation;  

1. A)

Direct Material	$83,000
Direct Labor	$42,000
Total Manufacturing Overhead	$52,800
Total Product Cost	$177,800

1. B)

Total Selling Expenses	$38,400
Total Administrative Expenses	$33,200
Total Period Cost	$71,600

2.

A	Total Direct Manufacturing Cost	$125,000
B	Total Indirect Manufacturing Cost	$52,800

Explanation;

2.A)

Direct Material	$83,000
Direct Labor	$42,000
Total Direct Manufacturing Cost	$125,000

2. B)

Variable Manufacturing Overhead	$20,600
Fixed Manufacturing Overhead	$32,200
Total Indirect Manufacturing Cost	$52,800

3.

A	Total Manufacturing Cost	$177,800
B	Total Non Manufacturing Cost	$71,600
C	Total Conversion Cost	$94,800
	Prime Cost	$125,000

Explanation;

3. A.

Direct Material	$83,000
Direct Labor	$42,000
Total Manufacturing Overhead	$52,800
Total Manufacturing Cost	$177,800

3.B).

Total Selling Expense	$38,400
Total Administrative Expenses	$33,200
Total Manufacturing Cost	$71,600

3. C).

Direct Labor	$42,000
Total Manufacturing Overhead	$52,800
Total Conversion cost	$94,800

Prime Cost

Direct Material	$83,000
Direct Labor	$42,000
Total Prime Cost	$125,000

4.

Total Variable Manufacturing Cost	$145,600
Total Fixed Cost for the company as a whole	$83,600
Variable Cost Per Unit produced and sold	$166

Explanation;

4.A.

Direct Material	$83,000
Direct Labor	$42,000
Variable Manufacturing Overhead	$20,600
Total Variable Manufacturing Cost	$145,600

4.B.

Fixed Manufacturing Overhead	$32,200
Fixed Selling Expense	$23,600
Fixed Administrative Expenses	$27,800
Total Fixed Cost	$83,600

4. C.

Direct Material	$83,000
Direct Labor	$42,000
Total Variable Manufacturing Overhead	$20,600
Varible Selling Expense	$14,800
Variable Administrative Expenses	$5400
Total Variable Cost	$165,800
Number of Units produced and sold	$1000
Variable Cost Per Unit produced and sold	166