Assume that company makes only one product and uses a standard costing system. The standard cost card for that product showsstandard direct labor-hours allowed per unit of 0.50 hours. The standard direct labor pay rate is $16 per hour. While the company'sbudgeted level of production per period is 19,000 units, in a recent period, the company actually produced 19,850 units. During this periodthe company actually worked 10,500 direct labor-hours and paid its direct laborers $16.50 per hour. Based on this information, the totalincrease recorded in the Work in Process account with respect to direct labor would be:Multiple Choiceс$158,800.$172,050.$166,800.$162762€20#Nov

Businesses utilise standard costing, a cost accounting technique, to set fixed, anticipated expenses…

Answered: Assume that company makes only one…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.50 Direct labor $ 4.00 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45 15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 8 pounds at $10.00 per pound Direct labor: 5 hours at $13 per hour Variable overhead: 5 hours at $8 per hour Total standard variable cost per unit $ 80.00 65.00 40.00 $ 185.00 The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $ 290,000 $ 280,000 Variable Cost per Unit Sold $ 21.00 $ 12.00 The planning budget for March was based on producing and selling 15,000 units. However, during March the company actually produced and sold 17,000 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $8.00 per pound. All of this material was used in production. b. Direct-laborers worked 64,000 hours at a rate of $14.00 per hour. c. Total variable…
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 8 pounds at $10.00 per pound $ 80.00 Direct labor: 5 hours at $13 per hour 65.00 Variable overhead: 5 hours at $8 per hour 40.00 Total standard variable cost per unit $ 185.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 290,000 Sales salaries and commissions $ 280,000 $ 21.00 Shipping expenses $ 12.00 The planning budget for March was based on producing and selling 15,000 units. However, during March the company actually produced and sold 17,000 units and incurred the following costs: a. Purchased 170,000 pounds of raw materials at a cost of $8.00 per pound. All of this material was used in production. b. Direct-laborers worked 64,000 hours at a rate…
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 4 pounds at $9.00 per pound Direct labor: 3 hours at $15 per hour Variable overhead: 3 hours at $6 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Advertising Sales salaries and commissions Shipping expenses Fixed Cost per Month $36.00 45.00 18.00 $99.00 $ 210,000 $ 120,000 Variable manufacturing overhead cost Variable Cost per Unit Sold $ 13.00 $ 4.00 The planning budget for March was based on producing and selling 26,000 units. However, during March the company actually produced and sold 31,000 units and incurred the following costs: a. Purchased 155,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. b. Direct-laborers worked 56,000 hours at a rate of $16.00…
Sardi Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,100 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials $ 8.90 Direct labor 5.90 Variable manufacturing overhead 1.70 Fixed manufacturing overhead 3.70 Unit product cost $ 20.20 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 20% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $5.30 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the…
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.50 Direct labor $ 3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.50 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.)
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: $ 55.00 Direct material: 5 pounds at $11.00 per pound Direct labor: 3 hours at $12 per hour Variable overhead: 3 hours at $7 per hour 36.00 21.00 Total standard variable cost per unit $112.00 The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Month $ 280,000 $ 260,000 per Unit Sold Advertising Sales salaries and commissions $ 20.00 $ 11.00 Shipping expenses The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs: a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct-laborers worked 63,000 hours at a rate of $13.00 per hour. c. Total variable…
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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $10.00 per pound $ 50.00 Direct labor: 3 hours at $17 per hour 51.00 Variable overhead: 3 hours at $7 per hour 21.00 Total standard variable cost per unit $ 122.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 330,000 Sales salaries and commissions $ 360,000 $ 25.00 Shipping expenses $ 16.00 The planning budget for March was based on producing and selling 24,000 units. However, during March the company actually produced and sold 30,600 units and incurred the following costs: Purchased 170,000 pounds of raw materials at a cost of $9.00 per pound. All of this material was used in production. Direct-laborers worked 68,000 hours at a rate of…
The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,700 units per month (which represents the company's capacity): Manufacturing: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative: Variable Fixed Present sales amount to 6,100 units per month. An order has been received from a customer in a foreign market for 2,600 units. The order would not affect regular sales. Total fixed costs, both manufacturing and selling and administrative, would not be affected by this order. The variable selling and administrative costs would have to be incurred for this special order as well as all other sales. Assume that direct labor is a variable cost. Multiple Choice Assume the company has 80 units left over from last year which have small defects and which will have to be sold at a reduced price for scrap. The sale of these defective units will have no effect on the company's other sales. Which of the following costs is…
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: $ 55.00 Direct material: 5 pounds at $11.00 per pound Direct labor: 3 hours at $12 per hour Variable overhead: 3 hours at $7 per hour 36.00 21.00 Total standard variable cost per unit $112.00 The company also established the following cost formulas for its selling expenses: Fixed Cost Variable Cost per Month $ 280,000 $ 260,000 per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 20.00 $ 11.00 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the folowing costs: a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct-laborers worked 63,000 hours at a rate of $13.00 per hour. c. Total variable…
The Garvis Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4.50 per unit and other variable manufacturing costs of $1.50 per unit. The standard production rate is 20 units per machinehour. Total budgeted and actual fixed manufacturing overhead costs are $840,000. Fixed manufacturing overhead is allocated at $14 per machine-hour based on fixed manufacturing costs of $840,000 , 60,000 machine-hours, which is the level Garvis uses as its denominator level. The selling price is $10 per unit. Variable operating (nonmanufacturing) cost, which is driven by units sold, is $2 per unit. Fixed operating (nonmanufacturing) costs are $240,000. Beginning inventory in 2017 is 60,000 units; ending inventory is 80,000 units. Sales in 2017 are 1,080,000 units. The same standard unit costs persisted throughout 2016 and 2017. For simplicity, assume that there are no price, spending, or efficiency variances. Q. Prepare an…

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