10% retum for the earn in terms of dollars $2,500,000 $25,000.000 30,000,000 to

Question

10% retum for the earn in terms of dollars $2,500,000 $25,000.000 30,000,000 to 6) The following information relates to Wagner, Inc. Advertising Costs 510,60 ministrative Salaries Delivery Vehicle Depreciation 1300 20 10,500 10,000 actory Repair and Maintenanoe ndirect Labor Indirect Materials Manufacturing Equipment Depreciation Office Rent 51,000 2500 dent's Salary ales Revenue 530,000 4700 les Salary How much were Wagner's period costs? A) $87,700 B) $21,700 C) $534,700 D) $7200 7. Which of the following businesses is most likely to use a process costing system? A) a baker producing cakes to order B) a legal service provider C) an audit service provider D) a candy manufacturer

Explanation / Answer

5 Particulars Amount $ Fee/Golfer                      65.00 Less:Variable cost per golfer                     -10.00 Contribution margin/golfer                      55.00 Total no.of golfers expected for the year                5,00,000 Total contribution margin (500,000*55)    2,75,00,000.00 Less:Fixed costs for the period -2,50,00,000.00 Income generated        25,00,000.00 6-Period costs Particulars Amount $ Advertising costs              10,600.00 Admin Salaries              17,600.00 Delivery vehicle depreciation                1,300.00 Factor repairs and maintenace                             -   Forms part of cost of goods sold Indirect labour                             -   Forms part of cost of goods sold Indirect material                             -   Forms part of cost of goods sold Manufacturing equipment depreciation                             -   Forms part of cost of goods sold Office rent              51,000.00 President's salary                2,500.00 Sales revenue                             -   Not an expense Sales salary                4,700.00              87,700.00 Period cost refers to an expense which expensed only in one period i.e period in which it is incurred and not forming part of cost of goods sold on the income statement 7- Option D Process costing is suitable for production of homogenous goods in large quantities In case of Candy manufacturer, he produces candies in large quantities who are homogeneous

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