8,800
Total product (manufacturing) cost
$
53,200
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements; Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.; 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
161) Glew Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.00
Direct labor
$
3.35
Variable manufacturing overhead
$
1.75
Fixed manufacturing overhead
$
8,800
Sales commissions
$
1.00
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
4,000
For financial reporting purposes, the total amount of period costs incurred to sell 4,000 units is closest to:
A) $6,400
B) $9,600
C) $4,000
D) $5,600
Answer: B
Explanation:
Sales commissions
$
1.00
Variable administrative expense
0.40
Variable selling and administrative expense per unit
$
1.40
Total variable selling and administrative expense
($1.40 per unit × 4,000 units sold)
$
5,600
Total fixed selling and administrative expense
4,000
Total period (nonmanufacturing) cost
$
9,600
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements; Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-03 Understand cost classifications used to prepare financial statements: product costs and period costs.; 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
162) Glew Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.00
Direct labor
$
3.35
Variable manufacturing overhead
$
1.75
Fixed manufacturing overhead
$
8,800
Sales commissions
$
1.00
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
4,000
If 3,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
A) $33,300
B) $31,050
C) $28,050
D) $39,900
Answer: C
Explanation:
Direct materials
$
6.00
Direct labor
3.35
Direct manufacturing cost per unit (a)
$
9.35
Number of units produced (b)
3,000
Total direct manufacturing cost (a) × (b)
$
28,050
Difficulty: 1 Easy
Topic: Cost Classifications for Assigning Costs to Cost Objects; Cost Classifications for Manufacturing Companies; Cost Classifications for Predicting Cost Behavior
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.; 01-02 Identify and give examples of each of the three basic manufacturing cost categories.; 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
163) Glew Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.00