Questions
In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.
7) T/F In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.
8) T/F The limited liability of stockholders in the corporate business structure makes it harder to raise equity capital.
9) T/F In the year 2008, nearly three out of four business firms in the United States were organized as proprietorships.
10) T/F When demand is relatively price inelastic, price and total revenue will change in the same direction.
11) T/F As business firms exit a perfectly competitive market, this will typically decrease the profits of those firm who remain in the market.
In: Economics
Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs.
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 11,250 | $ | 15,750 | $ | 27,000 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 1.90 | $ | 2.70 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 18,000 | $ | 10,500 | ||
| Direct labor cost | $ | 25,000 | $ | 9,500 | ||
| Actual machine-hours used: | ||||||
| Molding | 2,200 | 1,300 | ||||
| Fabrication | 1,100 | 1,400 | ||||
| Total | 3,300 | 2,700 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-9, assume that Sweeten Company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments and Job P included 20 units and Job Q included 30 units. For questions 10-15, assume that the company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.
14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
In: Accounting
Different Cost Classifications for Different Purposes
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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 | $ | 73,000 | ||||
| Direct labor | $ | 37,000 | ||||
| Variable manufacturing overhead | $ | 16,600 | ||||
| Fixed manufacturing overhead | 29,200 | |||||
| Total manufacturing overhead | $ | 45,800 | ||||
| Variable selling expense | $ | 12,800 | ||||
| Fixed selling expense | 19,600 | |||||
| Total selling expense | $ | 32,400 | ||||
| Variable administrative expense | $ | 4,400 | ||||
| Fixed administrative expense | 25,800 | |||||
| Total administrative expense | $ | 30,200 | ||||
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:
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 | $ 82,000 | |
|---|---|---|
| Direct labor | $ 41,500 | |
| Variable manufacturing overhead | $ 20,200 | |
| Fixed manufacturing overhead | 31,900 | |
| Total manufacturing overhead | $ 52,100 | |
| Variable selling expense | $ 14,600 | |
| Fixed selling expense | 23,200 | |
| Total selling expense | $ 37,800 | |
| Variable administrative expense | $ 5,300 | |
| Fixed administrative expense | 27,600 | |
| Total administrative expense | $ 32,900 |
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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 | $ | 82,000 | ||||
| Direct labor | $ | 41,500 | ||||
| Variable manufacturing overhead | $ | 20,200 | ||||
| Fixed manufacturing overhead | 31,900 | |||||
| Total manufacturing overhead | $ | 52,100 | ||||
| Variable selling expense | $ | 14,600 | ||||
| Fixed selling expense | 23,200 | |||||
| Total selling expense | $ | 37,800 | ||||
| Variable administrative expense | $ | 5,300 | ||||
| Fixed administrative expense | 27,600 | |||||
| Total administrative expense | $ | 32,900 | ||||
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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 $ 85,000
Direct labor $ 43,000
Variable manufacturing overhead $ 21,400
Fixed manufacturing overhead 32,800
Total manufacturing overhead $ 54,200
Variable selling expense $ 15,200
Fixed selling expense 24,400
Total selling expense $ 39,600
Variable administrative expense $ 5,600
Fixed administrative expense 28,200
Total administrative expense $ 33,800
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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 | $ | 77,000 | ||||
| Direct labor | $ | 39,000 | ||||
| Variable manufacturing overhead | $ | 18,200 | ||||
| Fixed manufacturing overhead | 30,400 | |||||
| Total manufacturing overhead | $ | 48,600 | ||||
| Variable selling expense | $ | 13,600 | ||||
| Fixed selling expense | 21,200 | |||||
| Total selling expense | $ | 34,800 | ||||
| Variable administrative expense | $ | 4,800 | ||||
| Fixed administrative expense | 26,600 | |||||
| Total administrative expense | $ | 31,400 | ||||
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?
In: Accounting
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
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 | $ | 80,000 | ||||
| Direct labor | $ | 40,500 | ||||
| Variable manufacturing overhead | $ | 19,400 | ||||
| Fixed manufacturing overhead | 31,300 | |||||
| Total manufacturing overhead | $ | 50,700 | ||||
| Variable selling expense | $ | 14,200 | ||||
| Fixed selling expense | 22,400 | |||||
| Total selling expense | $ | 36,600 | ||||
| Variable administrative expense | $ | 5,100 | ||||
| Fixed administrative expense | 27,200 | |||||
| Total administrative expense | $ | 32,300 | ||||
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?
In: Accounting