Problem 1-24 Different Cost Classifications for Different Purposes [LO1-1, LO1-2

Question

Problem 1-24 Different Cost Classifications for Different Purposes [LO1-1, LO1-2, LO1-3, LO1-4, LO1-5] Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Variable selling expense Fixed selling expense Total selling expense Variable administrative expense Fixed administrative expense Total administrative expense $ 80,000 $ 40,500 s 19,400 31,300 $ 50,700 $ 14,200 22,400 $ 36,600 $ 5,100 27,200 $ 32,300 Required 1. With respect to cost classifications for preparing financial statements a. What is the total product cost? b. What is the total period cost? 2. With respect to cost classifications for assigning costs to cost objects: a. What is total direct manufacturing cost? b. What is the total indirect manufacturing cost? 3. With respect to cost classifications for manufacturers: a. What is the total manufacturing cost? b. What is the total nonmanufacturing cost? c. What is the total conversion cost and prime cost? 4. With respect to cost classifications for predicting cost behavior: a. What is the total variable manufacturing cost? b. What is the total fixed cost for the company as a whole? c. What is the variable cost per unit produced and sold? 5. With respect to cost classifications for decision making a. If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?

Explanation / Answer

Req 1. Total Product cost: Direct Material 80000 Direct Labouor 40500 Variable manufacturing cost 19400 Fixed Manufacturing cost 31300 Total Product cost: 171200 Total Period cost: Total selling expense 36600 Total Admin expense 32300 Total Period cost: 68900 Req 2. Direct Manufacturing cost: Direct Material 80000 Direct Labouor 40500 Total Direct Manufacturing cost 120500 Indirect Mannufacturing cost: Variable manufacturing cost 19400 Fixed Manufacturing cost 31300 Total Indirect Manufacturing cost 50700 Req 3. Total Manufacturing cost Direct Material 80000 Direct Labouor 40500 Variable manufacturing cost 19400 Fixed Manufacturing cost 31300 Total Manufacturing cost 171200 Total Non Manufacturing cost Total selling expense 36600 Total Admin expense 32300 Total Non Manufacturing cost 68900 Total Conversion cost: Direct Labouor 40500 Variable manufacturing cost 19400 Fixed Manufacturing cost 31300 Total Conversion cost: 91200 Prime cost: Direct Material 80000 Direct Labouor 40500 Total Prime cost 120500 Req 4. Total Variable cost Direct Material 80000 Direct Labouor 40500 Variable Manufacturing cost 19400 Total Variable Manufacturing cost 139900 Total Fixed cost: Fixed manufacturing cost 31300 Fixed selling cost 22400 Fixed admin cost 27200 Total Fixed cost: 80900 Variable cost per unit: Total Variable cost 159200 Divide: Number of units 1000 Variable cost per unit: 159.2 Req 5. Incremental manufacturing cost for producing 1001th unit: Total Variable manufacturing cost 139900 Divide: Number of units 1000 Incremental Manufacturing cost     139.9

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