Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as either variable or fixed with respect to the number of units produced and sold, and second, as either a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) Cost Item Direct labour Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory Administrative office supplies Direct materials used (wood, bolts, etc.) Utilities, factory Total costs Average product cost $ Cost Behavior Variable O Increase O Decrease O Remain unchanged 0 $ per patio set Fixed Selling and Administrative Cost 0 $ 2. Compute the average product cost per patio set. (Round your answer to 2 decimal places.) 0 $ Product Cost Direct 0 $ Indirect 0 3. Due to reduced demand, assume that production drops to only 1,000 sets per year. Would you expect the average product cost per patio set to increase, decrease, or remain unchanged?

Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as either variable or fixed with respect to the number of units produced and sold, and second, as either a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) Cost Item Direct labour Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory Administrative office supplies Direct materials used (wood, bolts, etc.) Utilities, factory Total costs Average product cost $ Cost Behavior Variable O Increase O Decrease O Remain unchanged 0 $ per patio set Fixed Selling and Administrative Cost 0 $ 2. Compute the average product cost per patio set. (Round your answer to 2 decimal places.) 0 $ Product Cost Direct 0 $ Indirect 0 3. Due to reduced demand, assume that production drops to only 1,000 sets per year. Would you expect the average product cost per patio set to increase, decrease, or remain unchanged?

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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Prime cost is the (Total )summation of Select one: a. Direct material +Direct Labour +Direct Expenses b. Direct material +Direct Labour + Selling Overheads c. Direct material +Direct Labour +Factory overheads d. Direct material +Direct Labour +Office Overheads
Answer the below questions
Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.
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Which of the following statement(s) islare correct? I. Manufacturing overhead includes all manufacturing costs except direct labor and direct materials II. Prime costs consist of direct material and direct labor. Conversion cost is essentially direct labor O A. I only O B. Il only O C. Both I & II D. Neither I nor II
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The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 103,000 $70,000 $ 23,000 $ 65,000 $ 6,000 $ 2,000 $ 17,000 $ 18,000 $ 106,000 $ 5,000 $ 111,000 $ 426,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling…
Which of the following is NOT true ? a. The salary of the factory manager is considered to be an indirect cost of producing one unit of product. b. An indirect cost cannot be easily traced to a particular cost object. c. The classification of a cost as direct or indirect does not depend on the cost object. d. A direct cost can be easily traced to a particular cost object.
Requirement Prepare an income statement and a supporting schedule of cost of goods manufactured.