1. Manufacturing overhead consists of A. all manufacturing costs B. indirect mat
ID: 2418084 • Letter: 1
Question
1. Manufacturing overhead consists of A. all manufacturing costs B. indirect materials but not indirect labor C all manufacturing costs, except direct materials and direct labor D. indirect labor but not indirect materials Which of the following should NOT be included as part of manufacturin overhead at a company that makes office furniture? 2, A. sheet steel in a file cabinet made by the company B. manufacturing equipment depreciation C. idle time for direct labor D. taxes on a factory building. 3. Each of the following would be a period cost except: A. the salary of the company president's secretary B. the cost of a general accounting office. C. depreciation of a machine used in manufacturing D. sales commissions 4. Conversion costs do NOT include A depreciation B. direct materials C. indirect labor D. indirect materialsExplanation / Answer
1. Manufacturing overhead consists of option C -All manufacturing costs except direct material and direct labor.
2. For a company that makes office furniture option A. Sheet steel used to make office file cabinet will not be manufacturing overhead as it is direct material cost
3. C . Depreciation of machine used in manufacturing is a product cost and will not be part of period cost.
4. Conversion cost id Direct LAbor+ Manufacturing overheads & does not include B. Direct materials
5. At 10500 level of activity , per unit of fixed cost will be less than that of 10000 unit level, the variable cost per unit will be same. So option is D .total cost per unit will decrease.
6. Variable cost option B. remains constant on a per unit basis as the no of units produced increases .
7. within the relevant range variable cost per unit will -- option B remain constant.
8.An example of committed fixed cost is option C -property tax on factory building as it is not at the discretion of management.
9. Option B cost of shipping is not a direct cost as it is not traceable to product.
10. Option A $50000 is conversion cost ( Direct labor +manufacturing OH)
11. Option D -contribution margin
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