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Miller Company’s total sales are $126,000. The company’s direct labor cost is $15,120, which represents 30%...

Miller Company’s total sales are $126,000. The company’s direct labor cost is $15,120, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $18,900 and its only variable selling and administrative expense is a sales commission of 5% of sales. The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs.

Required:

1. What is the total manufacturing overhead cost?

2. What is the total direct materials cost?

3. What is the total manufacturing cost?

4. What is the total variable selling and administrative cost?

5. What is the total variable cost?

6. What is the total fixed cost?

7. What is the total contribution margin?

Solutions

Expert Solution

Req 1.
Direct labour 15120
Direct labor as % of Conversion Cost 30%
Total conversion cost (15120/30 *100) 50400
Less: Labour cost 15120
Manufacturing overheads cost (Fixed) 35280
Req 2.
Direct labour 15120
Direct labor as % of Prime cost 40%
Total Prime cost (15120/40 *100) 37800
Less: Labour cost 15120
Material cost consumed 22680
Req 3.
Total Manufacturing cost:
Material 22680
Labor 15120
Manufacturing overheads 35280
Total Manufacturing cost: 73080
Req 4.
Total sales 126000
Variable selling and admin expense as% of sales 5%
Total Variable Selling and admin expense 6300
Req 5.
Total variable cost:
Material 22680
Labor 15120
Variable Selling and admin expense 6300
Total Variable cost 44100
Req 6.
Total Fixed cost:
Fixed Manufacturing Overheads 35280
Fixed Selling and admin expense (18900-6300) 12600
Total Fixed cost: 47880
Req 7.
Total sales 126000
Less: variable cost 44100
Contribution margin 81900

ekkarill92 answered 2 years ago
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