Sweetwater Company manufactures two products, Mountain Mist and Valley Stream. The company prepares its master budget on the basis of standard costs. The following data are for March. Mountain Mist Standards Direct materials Direct labor Valley Stream 3 ounces at $15 per ounce 5 hours at $60 per hour $48 $335,340 5,750 4 ounces at $16.50 per ounce 6 hours at $75 per hour $52.50 $397,800 7,800 Variable overhead (per direct labor-hour) Fixed overhead (per month) Expected activity (direct labor-hours) Actual results Direct material (purchased and used) Direct labor Variable overhead Fixed overhead Units produced (actual) 3,100 ounces at $13.50 per ounce 4,900 hours at $60.75 per hour $242,550 $313,950 1,000 units 4,700 ounces at $17.25 per ounce 7,400 hours at $76.50 per hour $378,510 $396,000 1,200 units

Q: Understand thedifferences between directand indirect costs

A: Cost:   It refers to the economic value incurred by an organization for manufacturing a product or…

Q: Distinguish between two methods of allocating common costs.

A: Cost Allocation Method: The cost allocation method is the method by which the costs to be assigned…

Q: true of false: A collection of costs to be assigned is called a cost pool.

A: Activity based Costing system is a method which is used to calculate total amount of Cost by…

Q: Distinguish between discretionary fixed costs and committed fixed costs.

A: Discretionary fixed costs and committed fixed costs: Both costs are considered as fixed costs but…

Q: Explain the term internal failure costs.

A: Internal failure costs: Internal failure costs include additional production-related costs that are…

Q: Examples of transaction costs

A: Transaction costs are the costs which occur during buying or selling of services and goods. They are…

Q: Define the term avoidable cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: How are joint costs allocated? Explain and analyze using numerical example.

A: Joint Costs In business different costs are incurred in the production process, but in certain…

Q: a range in which the relationship between the cost and its driver is still valid is call

A: Solution: A range in which the relationship between the cost and its driver is still valid is called…

Q: Describe the concept of an equivalent unit and how to compute equivalent units

A:

Q: Explain the difference between a controllable and a noncontrollable cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Distinguish between indirect costs and direct costs.

A: Direct Costs and Indirect Costs are two important costs. Direct costs are those costs which are…

Q: How do you find full absorption cost

A: Absorption costing refers to the method of managerial accounting in order to capture all the costs…

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.