The total product cost. Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead .

Question

The following errors took place in journalizing and posting transactions:a. The payment of $3,125 from a customer on account was recorded as a debit to Cash and a credit toAccounts Payable.b. Advertising expense of $1,500 paid for the current month was recorded as a debit to MiscellaneousExpense and a credit to Advertising Expense.c. The purchase of supplies of $2,690 on the account was recorded as a debit to Office Equipment anda credit to Supplies.d. The receipt of $3,750 for services rendered was recorded as a debit to Accounts Receivable and acredit to Fees Earned.Required:Prepare journal entries to correct the errors.Each error correction carries equal marks.

Answer 1

Question

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

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The following errors took place in journalizing and posting transactions:a. The payment of $3,125 from a customer on account was recorded as a debit to Cash and a credit toAccounts Payable.b. Advertising expense of $1,500 paid for the current month was recorded as a debit to MiscellaneousExpense and a credit to Advertising Expense.c. The purchase of supplies of $2,690 on the account was recorded as a debit to Office Equipment anda credit to Supplies.d. The receipt of $3,750 for services rendered was recorded as a debit to Accounts Receivable and acredit to Fees Earned.Required:Prepare journal entries to correct the errors.Each error correction carries equal marks.

Required:a) Journalize the following transactions using the direct write-off method of accounting foruncollectible receivables:Aug. 7. Received $175 from Roosevelt McLair and wrote off the remainder owed of $400 asuncollectible.Nov. 23. Reinstated the account of Roosevelt McLair and received $400 cash in full payment.b) Journalize the following transactions using the allowance method of accounting for uncollectiblereceivables:Feb. 12. Received $750 from Manning Wingard and wrote off the remainder owed of $2,000 asuncollectible.June 30. Reinstated the account of Manning Wingard and received $2,000 cash in full payment.Each journal carries equal marks

If someone tracks, tallys and totals a current liabilities for an accounting period, and then seeks to apply this value in a calculation to assess our liquidity, what’s the difference between the current ratio and the “acid-test” (or “quick”) ratio? Does the difference between these two metrics even matter?

Answer 2

Question

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

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Answer 3

Question

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

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Answer 4

Question

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

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Answer 5

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

Answer 6

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

Answer 7

Chapter 1, Problem 24P

1.

(a)

To determine

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

Answer 8

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

Answer 9

(b)

To determine

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

Answer 10

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

Answer 11

2.

(a)

To determine

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

Answer 12

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

Answer 13

(b)

To determine

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

Answer 14

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

Answer 15

3.

(a)

To determine

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

Answer 16

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

Answer 17

(b)

To determine

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

Answer 18

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

Answer 19

(c)

To determine

To identify: The total conversion cost and prime cost.

Prime Costs: Prime cost is the primary cost incurred to produce product, it is a sum total of direct material costs and direct manufacturing labor costs.

Conversion Costs: Conversion cost is the cost of transferring the raw material into finished product, it is sum total of direct manufacturing labor costs and manufacturing overhead costs.

Answer 20

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

Answer 21

4.

(a)

To determine

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

Answer 22

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

Answer 23

(b)

To determine

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

Answer 24

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

Answer 25

(c)

To determine

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

Answer 26

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

Answer 27

5.

To determine

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

Answer 28

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Answer 39

Ch. 1 - Prob. 1Q Ch. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5Q Ch. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8Q Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...

The total product cost. Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead .

Videos

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

Chapter 1 Solutions

The total product cost. Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead .

Videos

To identify: The total product cost. Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

To identify: The total period cost. Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

To identify: The total direct manufacturing cost. Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

To identify: The total indirect manufacturing cost. Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

To identify: The total manufacturing cost. Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

To identify: The total nonmanufacturing cost. Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

To identify: The total variable manufacturing cost. Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

To identify: The total fixed cost. Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

To identify: The variable cost per unit. Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

To identify: The incremental manufacturing cost. Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.

Chapter 1 Solutions

To identify: The total product cost.

Product Cost: Product Cost is the total cost incurred to produce a product which includes cost of material used, labor cost and overhead.

To identify: The total period cost.

Period Costs: Period Costs is the cost incurred by the business except the cost of goods sold. Period costs are the expense of the same period in which it is incurred.

To identify: The total direct manufacturing cost.

Direct manufacturing: Direct manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and direct expenses.

To identify: The total indirect manufacturing cost.

Indirect manufacturing: Indirect manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and indirect expenses.

To identify: The total manufacturing cost.

Manufacturing Cost: Manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and manufacturing overheads.

To identify: The total nonmanufacturing cost.

Nonmanufacturing: Nonmanufacturing cost is the cost which is not directly linked with the manufacturing of a product but it includes selling and administration expense.

To identify: The total variable manufacturing cost.

Variable manufacturing cost: Variable manufacturing cost is the total cost incurred to manufacture a product which includes cost of material used, labor cost and variable overheads.

To identify: The total fixed cost.

Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect of the level of production on it.

To identify: The variable cost per unit.

Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher the production level, higher is the variable cost, and lowers the production level, lower is the variable cost.

To identify: The incremental manufacturing cost.

Incremental Manufacturing cost: Incremental manufacturing cost is the increase in the total cost incurred to manufacture a product which includes the cost of material used, labor cost and manufacturing overheads.