The gross margin for December is:
A) $530,400
B) $227,700
C) $362,100
D) $1,421,100
Answer: A
Explanation:
Sales
$
1,555,500
Cost of goods sold
1,025,100
Gross margin
$
530,400
Difficulty: 1 Easy
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 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
273) A number of costs are listed below.
Cost Description
Cost Object
1.
Wages of carpenters on a home building site
A particular home
2.
Cost of wiring used in making a personal computer
A particular personal computer
3.
Manager's salary at a hotel run by a chain of hotels
A particular hotel guest
4.
Manager's salary at a hotel run by a chain of hotels
The particular hotel
5.
Cost of aluminum mast installed in a yacht at a yacht manufacturer
A particular yacht
6.
Monthly lease cost of X-ray equipment at a hospital
The Radiology (X-Ray) Department
7.
Cost of screws used to secure wood trim in a yacht at a yacht manufacturer
A particular yacht
8.
Cost of electronic navigation system installed in a yacht
at a yacht manufacturer
A particular yacht
9.
Cost of a replacement battery installed in a car at the auto repair shop of an automobile dealer
The auto repair shop
10.
Cost of a measles vaccine administered at an outpatient clinic at a hospital
A particular patient
Required:
For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.
Answer:
1. Wages of carpenters on a home building site; A particular home; Direct
2. Cost of wiring used in making a personal computer; A particular personal computer; Indirect
3. Manager's salary at a hotel run by a chain of hotels; A particular hotel guest; Indirect
4. Manager's salary at a hotel run by a chain of hotels; The particular hotel; Direct
5. Cost of aluminum mast installed in a yacht at a yacht manufacturer; A particular yacht; Direct
6. Monthly lease cost of X-ray equipment at a hospital; The Radiology (X-Ray) Department; Direct
7. Cost of screws used to secure wood trim in a yacht at a yacht manufacturer; A particular yacht; Indirect
8. Cost of electronic navigation system installed in a yacht at a yacht manufacturer; A particular yacht; Direct
9. Cost of a replacement battery installed in a car at the auto repair shop of an automobile dealer; The auto repair shop; Direct
10. Cost of a measles vaccine administered at an outpatient clinic at a hospital; A particular patient; Direct
Difficulty: 1 Easy
Topic: Cost Classifications for Assigning Costs to Cost Objects
Learning Objective: 01-01 Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.
Bloom's: Apply
AACSB: Reflective Thinking
AICPA: BB Critical Thinking; FN Measurement
274) Dobosh Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$7.05
Direct labor
$3.65
Variable manufacturing overhead
$1.60
Fixed manufacturing overhead
$113,400
Sales commissions
$1.50
Variable administrative expense
$0.55
Fixed selling and administrative expense
$36,450
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 9,000 units?
b. For financial reporting purposes, what is the total amount of period costs incurred to sell 9,000 units?
c. If 10,000 units are sold, what is the variable cost per unit sold?
d. If 10,000 units are sold, what is the total amount of variable costs related to the units sold?
e. If 10,000 units are produced, what is the total amount of manufacturing overhead cost incurred?
f. If the selling price is $21.60 per unit, what is the contribution margin per unit sold?
g. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?