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 $ 83,000 Direct labor $ 42,000 Variable manufacturing overhead $ 20,600 Fixed manufacturing overhead 32,200 Total manufacturing overhead $ 52,800 Variable selling expense $ 14,800 Fixed selling expense 23,600 Total selling expense $ 38,400 Variable administrative expense $ 5,400 Fixed administrative expense 27,800 Total administrative expense $ 33,200 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?

Answer 1

The answer is provided in a tabular form for all the parts of the questions.

	Head of Expense	Direct materials	Direct labor	Variable manufacturing overhead	Fixed manufacturing overhead	Variable selling expense	Fixed selling expense	Variable administrative expense	Fixed administrative expense	Total	Cost per unit
	Amounts incurred	83,000	42,000	20,600	32,200	14,800	23,600	5,400	27,800	249,400
1a.	Total Product cost	83,000	42,000	20,600	32,200					177,800
1b	Total Period Cost					14,800	23,600	5,400	27,800	71,600
2a.	Total Direct Manufacturing cost	83,000	42,000							125,000
2b.	Total inirect Manufacturing cost			20,600	32,200					52,800
3a.	Total manufacturing cost	83,000	42,000	20,600	32,200					177,800
3b.	Total non manufacturing cost					14,800	23,600	5,400	27,800	71,600
3c.	Total Conversion Cost		42,000	20,600	32,200					94,800
3c.	Total Prime Cost	83,000	42,000							125,000
4a.	Total Variable manufacturing Cost	83,000	42,000	20,600						145,600
4b.	Total Fixed cost				32,200		23,600		27,800	83,600
4c.	Variable cost per unit	83,000	42,000	20,600		14,800		5,400		165,800	165.8
5.	Incremental manufacturing cost/unit	83,000	42,000	20,600						145,600	145.6