Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
5,500
If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:
A) $14,600
B) $17,600
C) $11,600
D) $23,600
Answer: B
Explanation:
Total variable manufacturing overhead cost
($1.65 per unit × 4,000 units)
$
6,600
Total fixed manufacturing overhead cost
11,000
Total manufacturing overhead cost (a)
$
17,600
Difficulty: 1 Easy
Topic: Cost Classifications for Manufacturing Companies; Cost Classifications for Preparing Financial Statements
Learning Objective: 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
169) Schwiesow Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
7.05
Direct labor
$
3.50
Variable manufacturing overhead
$
1.65
Fixed manufacturing overhead
$
11,000
Sales commissions
$
1.00
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
5,500
If the selling price is $18.70 per unit, the contribution margin per unit sold is closest to:
A) $5.10
B) $1.80
C) $4.30
D) $8.15
Answer: A
Explanation:
Selling price per unit
$18.70
Direct materials
$7.05
Direct labor
3.50
Variable manufacturing overhead
1.65
Sales commissions
1.00
Variable administrative expense
0.40
Variable cost per unit sold
13.60
Contribution margin per unit
$5.10
Difficulty: 1 Easy
Topic: Cost Classifications for Predicting Cost Behavior; Using Different Cost Classifications for Different Purposes
Learning Objective: 01-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.; 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
170) Schwiesow Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
7.05
Direct labor
$
3.50
Variable manufacturing overhead
$
1.65
Fixed manufacturing overhead
$
11,000
Sales commissions
$
1.00
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
5,500
If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
A) $73,200
B) $69,300
C) $86,400
D) $63,300
Answer: D
Explanation:
Direct materials
$
7.05
Direct labor
3.50
Direct manufacturing cost per unit (a)
$
10.55
Number of units produced (b)
6,000
Total direct manufacturing cost (a) × (b)
$
63,300
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.