Manufacturing Overhead Item Cost Variable or Fixed Cost Direct Materials Hotdog per unit $1.00 Hotdog roll per unit $.50 Hotdog tray per unit Condiments per unit $.05 $.20 $110 Propane gas (for the year) Tongs $15 Rent paid to LaSalle $1,000

Manufacturing Overhead Item Cost Variable or Fixed Cost Direct Materials Hotdog per unit $1.00 Hotdog roll per unit $.50 Hotdog tray per unit Condiments per unit $.05 $.20 $110 Propane gas (for the year) Tongs $15 Rent paid to LaSalle $1,000

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

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

from the above list of 7 types of costs indicate which costs are direct materials and which are mfg overhead

Manufacturing
Overhead
Item
Cost
Variable or Fixed Cost Direct Materials
Hotdog per unit
$1.00
Hotdog roll per unit
$.50
$.05
Hotdog tray per unit
Condiments per unit
$.20
Propane gas (for the year)
Tongs
$110
$15
Rent paid to LaSalle
$1,000

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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QUESTION 9 Put the following steps in an Activity-Based-Costing system in the proper order. v Calculate a predetermined overhead rate. Identify a logical cost driver as an allocation base for each cost pool. Allocate the costs to the cost object by multiplying the predetermined overhead rate by the actual amount of the cost driver used by the cost object. v Separate total overhead into cost pools.
Prime cost consists of: Select one: O A. Direct labour B. O C. Factory overheads O D. a) and c) above Direct materials and direct labour
1. With ABC, overhead costs are assigned to each product based on ________. Group of answer choices machine hours per product price of the product a predetermined overhead rate for a single cost driver the proportion of that product’s use of the cost driver
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alpha $30 23 10 19 15 18 $115 Beta $18 16 8 21 11 13 $87 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
9
Define fixed overhead costs.
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Which best describes the flow of overhead costs in an activity-based costing system? Group of answer choices Overhead costs –> direct labor cost or hours –> products Overhead costs –> products Overhead costs –> activity cost pools –> cost drivers –> products Overhead costs –> machine hours –> products
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When computing the cost per equivalent unit under the wighted-average method of process costing, the cost per equivalent unit for direct material is computed by dividing the total direct-material cost by the total equivalent units. True or False?