Fixed manufacturing overhead per unit
$3.00
Number of units produced
5,000
Total fixed manufacturing overhead cost
$15,000
b.
Total variable manufacturing overhead cost
($1.25 per unit × 6,000 units)
$7,500
Total fixed manufacturing overhead cost
($3.00 per unit × 5,000 units*)
15,000
Total manufacturing overhead cost (a)
$22,500
Number of units produced (b)
6,000
Manufacturing overhead per unit (a) ÷ (b)
$3.75
*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 5,000 units.
c.
Direct materials
$6.10
Direct labor
2.90
Direct manufacturing cost per unit (a)
$9.00
Number of units produced (b)
4,000
Total direct manufacturing cost (a) × (b)
$36,000
d.
Total variable manufacturing overhead cost
($1.25 per unit × 4,000 units)
$5,000
Total fixed manufacturing overhead cost
($3.00 per unit × 5,000 units*)
15,000
Total indirect manufacturing cost
$20,000
*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 5,000 units.
Difficulty: 2 Medium
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
279) Skolnick Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$5.70
Direct labor
$3.60
Variable manufacturing overhead
$1.50
Fixed manufacturing overhead
$121,500
Sales commissions
$1.00
Variable administrative expense
$0.45
Fixed selling and administrative expense
$36,450
Required:
a. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?
b. If 8,000 units are produced, what is the total amount of indirect manufacturing costs incurred?
Answer:
a.
Direct materials
$5.70
Direct labor
3.60
Direct manufacturing cost per unit (a)
$9.30
Number of units produced (b)
8,000
Total direct manufacturing cost (a) × (b)
$74,400
b.
Total variable manufacturing overhead cost
($1.50 per unit × 8,000 units)
$12,000
Total fixed manufacturing overhead cost
121,500
Total indirect manufacturing cost
$133,500
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
280) Karpowicz Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows:
Average Cost per Unit
Direct materials
$6.25