Question

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				$	84,000
Direct labor				$	42,500
Variable manufacturing overhead	$	21,000
Fixed manufacturing overhead		32,500
Total manufacturing overhead				$	53,500
Variable selling expense	$	15,000
Fixed selling expense		24,000
Total selling expense				$	39,000
Variable administrative expense	$	5,500
Fixed administrative expense		28,000
Total administrative expense				$	33,500

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

1)	total product cost				180,000	answer
	total period cost				72500	answer
	total product cost
	Direct materials				84,000
	direct labor				42,500
	total manufacturing overhead				53,500
	total product cost				180,000
	total period cost
	total selling expense				39,000
	total administrative expense				33,500
	total period cost				72,500
2)	total direct manufacturing cost				126,500	answer
	total indirect manufacturing cost				53500	answer
	total direct manufacturing cost
	direct materials				84,000
	direct labor				42,500
	total direct manufacturing cost				126,500
	total indirect manufacturing cost
	Variable manufacturing overhead				21,000
	fixed manufacturing overhead				32,500
	total indirect manufacturing cost				53,500
3a)	Total manufacturing cost
	Direct materials					84,000
	direct labor					42,500
	Manufacturing overhead
	Variable manufacturing overhead				21,000
	fixed manufacturing overhead				32,500	53,500
	total manufacturing cost					180,000	answer
b)	total nonmanufacturing cost
	total selling expense					39,000
	total administrative expense					33,500
	total non manufacturing cost					72,500	answer
c)	conversion cost
	direct labor					42,500
	Manufacturing overhead
	Variable manufacturing overhead				21,000
	fixed manufacturing overhead				32,500	53,500
	conversion cost					96,000	answer
	prime cost
	Direct materials					84,000
	direct labor					42,500
	prime cost					126,500	answer
4)	total variable manufacturing cost					147,500	answer
	total fixed cost					84,500	answer
	variable cost per unit produced and sold					168	answer
	total manufacturing cost
	direct materials					84,000
	direct labor					42,500
	variable manufacturing overhead					21,000
	total variable manufacturing cost					147,500
	fixed manufacturing overhead					32,500
	fixed selling expense					24,000
	fixed administrative expense					28,000
	total fixed cost					84,500
	variable cost per unit produced and sold
	direct materials					84,000
	direct labor					42,500
	variable manufacturing overhead					21,000
	variable selling expense					15,000
	variable administrative expense					5,500
	total variable cost (a)					168,000
	number of units produced and sold (b)					1,000
	variable cost per unit produced and sold					168
5)	incremental cost per unit produced					168	answer