D) $57,750
Answer: C
Explanation:
Direct materials
$
4.85
Direct labor
3.35
Variable manufacturing overhead
1.35
Sales commissions
1.50
Variable administrative expense
0.45
Variable cost per unit sold
$
11.50
Variable cost per unit sold (a)
$
11.50
Number of units sold (b)
5,000
Total variable costs (a) × (b)
$
57,500
Difficulty: 1 Easy
Topic: Cost Classifications for Predicting Cost Behavior
Learning Objective: 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
218) Bowering Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.60
Direct labor
$
3.85
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
81,000
Sales commissions
$
0.50
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
44,550
For financial reporting purposes, the total amount of product costs incurred to make 9,000 units is closest to:
A) $81,000
B) $188,550
C) $107,550
D) $197,550
Answer: B
Explanation:
Direct materials
$
6.60
Direct labor
3.85
Variable manufacturing overhead
1.50
Variable manufacturing cost per unit
$
11.95
Total variable manufacturing cost
($11.95 per unit × 9,000 units produced)
$
107,550
Total fixed manufacturing overhead cost
81,000
Total product (manufacturing) cost
$
188,550
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
219) Bowering Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$
6.60
Direct labor
$
3.85
Variable manufacturing overhead
$
1.50
Fixed manufacturing overhead
$
81,000
Sales commissions
$
0.50
Variable administrative expense
$
0.50
Fixed selling and administrative expense
$
44,550
For financial reporting purposes, the total amount of period costs incurred to sell 9,000 units is closest to:
A) $35,700
B) $9,000
C) $53,550
D) $44,550
Answer: C
Explanation:
Sales commissions
$
0.50
Variable administrative expense
0.50
Variable selling and administrative expense per unit
$
1.00
Total variable selling and administrative expense
($1.00 per unit × 9,000 units sold)
$
9,000
Total fixed selling and administrative expense
44,550
Total period (nonmanufacturing) cost
$
53,550
Difficulty: 1 Easy
Topic: Cost Classifications for Preparing Financial Statements; Cost Classifications for Predicting Cost Behavior