Problem 1-24 (Algo) 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: Direct materials $ 72,000 Direct labor $ 36,500 Variable manufacturing overhead $ 16,200 Fixed manufacturing overhead 28,900 Total manufacturing overhead $ 45,100 Variable selling expense $ 12,600 Fixed selling expense 19,200 Total selling expense $ 31,800 Variable administrative expense $ 4,300 Fixed administrative expense 25,600 Total administrative expense $ 29,900 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?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Problem 1-24 (Algo) 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:
| Direct materials | $ 72,000 | |
|---|---|---|
| Direct labor | $ 36,500 | |
| Variable manufacturing overhead | $ 16,200 | |
| Fixed manufacturing overhead | 28,900 | |
| Total manufacturing overhead | $ 45,100 | |
| Variable selling expense | $ 12,600 | |
| Fixed selling expense | 19,200 | |
| Total selling expense | $ 31,800 | |
| Variable administrative expense | $ 4,300 | |
| Fixed administrative expense | 25,600 | |
| Total administrative expense | $ 29,900 |
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
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?
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