At 50,000 units of production, the Grayson Company expects costs to be as follows: Direct materials $140,000 Direct labour $100,000 $ 50,000 $ 40,000 $ 24,000 $5,000 $ 30,000 $ 15,000 Depreciation of factory Depreciation of production equipment Production supervisor's salary Supplies Indirect labour Electricity Assume all cost items are either strictly fixed or strictly variable. The total cost of direct materials at 40,000 units of production would be: Select one: a. $116,000

At 50,000 units of production, the Grayson Company expects costs to be as follows: Direct materials $140,000 Direct labour $100,000 $ 50,000 $ 40,000 $ 24,000 $5,000 $ 30,000 $ 15,000 Depreciation of factory Depreciation of production equipment Production supervisor's salary Supplies Indirect labour Electricity Assume all cost items are either strictly fixed or strictly variable. The total cost of direct materials at 40,000 units of production would be: Select one: a. $116,000

Name: At 50,000 units of production, the Grayson Company expects costs to b
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Description: At 50,000 units of production, the Grayson Company expects costs to be as follows:Direct materials$140,000$100,000$50,000$40,000Direct labourDepreciation of factoryDepreciation of production equipmentProduction supervisor's salarySuppliesIndirect la

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

At 50,000 units of production, the Grayson Company expects costs to be as follows:
Direct materials
$140,000
$100,000
$50,000
$40,000
Direct labour
Depreciation of factory
Depreciation of production equipment
Production supervisor's salary
Supplies
Indirect labour
Electricity
Assume all cost items are either strictly fixed or strictly variable.
The total cost of direct materials at 40,000 units of production would be:
Select one:
a. $116,000
b. $168,000
$ 24,000
$5,000
$ 30,000
$ 15,000
c. $112,000
d. $140,000

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