Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
171) 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 indirect manufacturing cost incurred is closest to:
A) $23,100
B) $9,900
C) $11,000
D) $20,900
Answer: D
Explanation:
Total variable manufacturing overhead cost
($1.65 per unit × 6,000 units)
$
9,900
Total fixed manufacturing overhead cost
11,000
Total indirect manufacturing cost
$
20,900
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
172) 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
The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:
A) $14.40
B) $15.10
C) $16.90
D) $12.20
Answer: D
Explanation:
Direct materials
$
7.05
Direct labor
3.50
Variable manufacturing overhead
1.65
Incremental manufacturing cost
$
12.20
Difficulty: 1 Easy
Topic: Cost Classifications for Decision Making
Learning Objective: 01-05 Understand cost classifications used in making decisions: differential costs, sunk costs, and opportunity costs.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
173) Lambeth Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
4.90
Direct labor
$
2.95
Variable manufacturing overhead
$
1.25
Fixed manufacturing overhead
$
8,000
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) $26,550
B) $23,550
C) $33,300
D) $27,300
Answer: B
Explanation:
Direct materials
$
4.90
Direct labor
2.95
Direct manufacturing cost per unit (a)
$
7.85
Number of units produced (b)
3,000
Total direct manufacturing cost (a) × (b)
$
23,550