Question

1-

The accounting records of Diego Company revealed the following costs, among others:

Direct Material                              85,000

Indirect Material 12,000

Factory depreciation 42,000

Indirect Labor                             8,500

Utilities Manufacturing O.H 3,700

Costs that would be considered in the calculation of manufacturing overhead total:

Select one:

a.
151,200

b.
24,200

c.
66,200

d.
15,700

2-

At a volume of 50,000 units, Dries reported sales revenues of OMR 1,000,000, variable costs of OMR 300,000, and fixed costs of OMR 140,000. The company's contribution margin per unit is:

Select one:

a. OMR 25

b. OMR 20

c. OMR 12

d. OMR 14

Answer 1

Answer. 1. c.) 66,200

Manufacturing overhead :- Manufacturing overheads are also considered as factory overhead, Which refers to the indirect manufacturing overheads that incurred during the production process like factory depreciation,indirect labor, indirect material etc.

Calculation of manufacturing overheads

Indirect Material. 12,000

Factory depreciation. 42,000

Indirect Labor 8,500

Utilities Manufacturing O.H. 3,700

Total manufacturing overhead. 66,200

Answer.2. d.) OMR 14

Contribution margin per unit :- It represent the per unit value of profit after consider only variable cost.

It calculated by deduct variable cost per unit from selling price per unit. It would not consider fixed cost.

Calculation of contribution margin per unit

Selling price per unit (OMR1000,000/50000units)= OMR20

Variable cost per unit (OMR300000/50000units) = OMR6

Contribution per unit. = OMR14