16) A company's relevant range of production is 10,000 to 15,000 units

Accounting Aug 10, 2020

16)

A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are as follows:

	Amount per Unit
Direct materials	$	7.00
Direct labor	$	4.00
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	5.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.00
Sales commissions	$	1.00
Variable administrative expense	$	0.50

If 11,800 units are produced, what is the total amount of indirect manufacturing costs incurred to support this level of production?

17)

A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are as follows:

	Amount per Unit
Direct materials	$	7.50
Direct labor	$	4.75
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	5.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.00
Sales commissions	$	1.00
Variable administrative expense	$	0.50

What is the incremental cost incurred if the company increases production from 12,000 to 12,001 units?

18)

A company's relevant range of production is 10,000 to 15,000 units. When it produces and sells 12,000 units, its unit costs are as follows:

	Amount per Unit
Direct materials	$	7.00
Direct labor	$	4.00
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead	$	5.00
Fixed selling expense	$	3.50
Fixed administrative expense	$	2.00
Sales commissions	$	1.00
Variable administrative expense	$	0.50

What is the total amount of variable cost incurred if the company produces and sells 10,800 units?

19 )

Assume the following information:


Direct materials			$	70,000
Direct labor			$	41,000
Variable manufacturing overhead	$	15,000
Fixed manufacturing overhead		25,000
Total manufacturing overhead			$	40,000
Variable selling expense	$	15,000
Fixed selling expense		20,000
Total selling expense			$	35,000
Variable administrative expense	$	8,000
Fixed administrative expense		12,000
Total administrative expense			$	20,000

What is the total product cost?

20)

Assume the following information:


Direct materials			$	70,000
Direct labor			$	53,000
Variable manufacturing overhead	$	10,000
Fixed manufacturing overhead		25,000
Total manufacturing overhead			$	35,000
Variable selling expense	$	15,000
Fixed selling expense		20,000
Total selling expense			$	35,000
Variable administrative expense	$	8,000
Fixed administrative expense		12,000
Total administrative expense			$	20,000

What is the total conversion cost?

Expert Solution

16	Total amount of indirect manufacturing costs incurred:
			$
	Variable manufacturing overhead	(11800*1.50)	17700
	Fixed manufacturing overhead	(12000*5)	60000
	Total		77700

17	Incremental cost incurred:
		$
	Direct materials	7.5
	Direct labor	4.75
	Variable manufacturing overhead	1.5
	Total	13.75

18	Total amount of variable cost incurred=Units sold and produced*Variable cost per unit
	Variable cost per unit:
		$
	Direct materials	7
	Direct labor	4
	Variable manufacturing overhead	1.5
	Sales commissions	1
	Variable administrative expense	0.5
	Total	14
	Total amount of variable cost incurred=10800*14=$ 151200

19	Product cost:
		$
	Direct materials	70000
	Direct labor	41000
	Variable manufacturing overhead	15000
	Fixed manufacturing overhead	25000
	Total	151000

20	Total conversion cost=Direct labor+Total manufacturing overhead=53000+35000=$ 88000

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