Cost Accounting

The correct answer is D, $700,000. The nonmanufacturing costs are the costs incurred to make the inventory are crossed out below. Notice that purchasing raw material is not the same thing as incurring a cost. You have simply traded one asset for another. You have not yet used it to make a product, or provide a service.

• In 1993 cost of goods sold being 90% of sales and 9.6% gross profit of sales. Company’s lack of ability to manage inventory and lack of cash forced them to order from more expensive (12-15%more) warehouse than steel mills.

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

14. If 11,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production?

Consolidated Company makes cardboard boxes. During the most recent accounting period Consolidated paid $60,000 for raw materials, $48,000 for labor, and $52,000 for overhead costs that were incurred to make boxes. Consolidated started and completed 400,000 boxes. Based on this information, what is the average manufacturing cost per box?

6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000, and depreciation on factory machinery $8,000.

* Implicit—This cost is implicit since it is not money out of the company’s pocket, but it is not applicable since the cost is not relevant.

Direct labor assembly costs are, by their nature, directly traceable to individual products. Therefore the relevant cost driver for this cost is the number of Direct Assembly Labor Hours. The other 21 cost categories are indirect costs.

Into which of the three elements of manufacturing cost would each of the following be classified? (Direct Labor, Direct Materials, and Manufactured Overhead)

Direct materials Raw materials inventory ................. $ 0 (Dec. 1) Raw materials purchased ............... 70,000 Less: Raw materials inventory (Dec. 31) .................................... 0 Direct materials used............................... Direct labor .................................................

During November, purchases of direct materials were $18,000. Direct labor and factory overhead costs were $20,000 and $28,000, respectively.

Direct material costs change due to the quantity, range, quality and price of materials required according to the specification for the order each time a unit of the product or service is produced. Direct labour costs are driven by the number of hours required and the rate per hour each product unit that has been set for each labour grade.

3. Under the new activity-based costing (ABC) system, compute the indirect cost allocation rates for each of the three activities:

unit, two types of costs are distinguished. Firstly the direct costs, consisting of the direct

Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?