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
179) Kesterson Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.20
Direct labor
$
3.10
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
14,000
Sales commissions
$
1.50
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
4,500
If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
A) $55,800
B) $63,900
C) $80,700
D) $64,800
Answer: A
Explanation:
Direct materials
$
6.20
Direct labor
3.10
Direct manufacturing cost per unit (a)
$
9.30
Number of units produced (b)
6,000
Total direct manufacturing cost (a) × (b)
$
55,800
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
180) Kesterson Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.20
Direct labor
$
3.10
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
14,000
Sales commissions
$
1.50
Variable administrative expense
$
0.40
Fixed selling and administrative expense
$
4,500
If 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
A) $8,100
B) $24,900
C) $22,100
D) $14,000
Answer: C
Explanation:
Total variable manufacturing overhead cost
($1.35 per unit × 6,000 units)
$
8,100
Total fixed manufacturing overhead cost
14,000
Total indirect manufacturing cost
$
22,100
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
181) Kesterson Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.20
Direct labor
$
3.10
Variable manufacturing overhead
$
1.35
Fixed manufacturing overhead
$
14,000
Sales commissions
$
1.50