Question

Which of the following statements is true about direct costs? a. A direct cost is a...

Which of the following statements is true about direct costs?

a.

A direct cost is a cost that can easily and conveniently be traced to a specified cost object.
b.

A direct cost is allocated to different cost objects.
c.

A direct cost is a cost that cannot be easily traced to a specified cost object.
d.

Manufacturing overhead is included as a direct cost.

QUESTION 4

  1. Doors, Inc. produced 25,000 units last year.  The following information was provided:

    Direct materials = $50/unit

    Direct labor = $15/unit

    Variable manufacturing overhead = $5/unit

    Fixed manufacturing overhead = $250,000

    Fixed selling and administrative costs = $10/unit

    Given the above information, calculate the unit product cost under variable costing (VC) and absorption costing (AC).

    a.

    None of the given answers are correct.
    b.

    VC = $65; AC = $70
    c.

    VC = $80; AC = $70
    d.

    VC = $70; AC = $80
    e.

    VC = $70; AC = $90

------------------------

QUESTION 7

  1. If a company has $600,000 in total sales, what will its contribution margin ratio be if the company has $200,000 in total variable expenses?

    a.

    33%
    b.

    25%
    c.

    75%
    d.

    67%

---------------------------------

QUESTION 8

  1. Incremental costs:

    a.

    are always equal to the incremental revenues.
    b.

    are incurred regardless of the decision being made.
    c.

    are the additional costs associated with one of the alternatives.
    d.

    should always be avoided.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. a. A direct cost is a cost that can easily and conveniently be traced to a specified cost object.

(These costs are directly accountable to a cost object and can be traced to the production of a specific item.)

4. e. VC = $70; AC = $90

Absorption Variable
Direct Materials 50 50
Direct Labor 15 15
Variable manufacturing overhead 5 5
Fixed manufacturing overhead 10
Fixed selling and administrative costs 10
Unit product cost 90 70

7. d. 67%

Sales = $600,000 ; VC = $200,000

Contribution margin = Sales - VC = 600,000 - 200,000 = 400,000

Contribution margin ratio = (Contribution margin/Sales)*100 = (400,000 / 600,000) * 100 = 67%

8. c. are the additional costs associated with one of the alternatives

( Incremental costs identifies the potential outcomes of one alternative compared to others)

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following statements about variable costing systems is true? A.    Variable overhead costs...
Which of the following statements about variable costing systems is true? A.    Variable overhead costs are treated as period costs B.    Fixed overhead costs are treated as product costs C.    Only direct materials and direct labor are included in total cost D.    Fixed overhead costs are treated as period costs
Which of the following is true of normal costing? a.Actual direct materials cost is traced to...
Which of the following is true of normal costing? a.Actual direct materials cost is traced to products, but estimated direct labor and estimated overhead costs are assigned using predetermined rates. b.Actual direct materials, actual direct labor, and actual overhead cost are assigned to products. c.Actual direct labor cost is traced to products, but estimated direct materials and estimated overhead costs are assigned using predetermined rates. d.Actual direct materials and direct labor costs are traced to products, but estimated overhead costs...
Burns Company incurred the following costs during the year: direct materials $23.50 per unit; direct labor...
Burns Company incurred the following costs during the year: direct materials $23.50 per unit; direct labor $15.30 per unit; variable manufacturing overhead $17.50 per unit; variable selling and administrative costs $9.60 per unit; fixed manufacturing overhead $126,000; and fixed selling and administrative costs $11,000. Burns produced 6,300 units and sold 6000 units. Determine the manufacturing cost per unit under (a) absorption costing and (b) variable costing. (Round answers to 2 decimal places, e.g. 52.75.)
Which of the following statements is true? A. Variable costing treats fixed overhead as a period...
Which of the following statements is true? A. Variable costing treats fixed overhead as a period cost. B. Absorption costing treats fixed overhead as a period cost. C. Absorption costing treats fixed overhead as an expense in the period it is incurred. D. Variable costing excludes all overhead from product costs. E. Managers can manipulate earnings more easily under variable costing by varying the production level.
The following manufacturing costs were incurred by the Walmart Company in 2019: Direct Materials $112,500 Direct...
The following manufacturing costs were incurred by the Walmart Company in 2019: Direct Materials $112,500 Direct Labor $175,000 Manufacturing overhead $235,000 These costs were incurred to produce 25,000 units of product. Variable manufacturing overhead was 80% of the direct materials cost. In 2020, the direct material and variable overhead costs per unit will increase by 15%, but the direct labor costs per unit are not expected to change. Fixed manufacturing costs are expected to increase by 7.5%. The company is...
Inventory Valuation under The reporting of the costs of manufactured products, normally direct materials, direct labor,...
Inventory Valuation under The reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.Absorption Costing and The concept that considers the cost of products manufactured to be composed only of those manufacturing costs that increase or decrease as the volume of production rises or falls (direct materials, direct labor, and variable factory overhead).Variable Costing At the end of the first year of operations, 6,200 units remained in the finished goods inventory. The...
Bobbys Company which produces a single product, has provided the following data for its most recent...
Bobbys Company which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 3,700 Variable costs per unit: Direct materials $ 43 Direct labor $ 27 Variable manufacturing overhead $ 10 Variable selling and administrative expense $ 5 Fixed costs: Fixed manufacturing overhead $ 318,200 Fixed selling and administrative expense $ 314,500 There were no beginning or ending inventories. The variable costing unit product cost was: A. $166 per unit...
1- Costs for direct materials, direct labor and manufacturing overhead are assigned to each job. True...
1- Costs for direct materials, direct labor and manufacturing overhead are assigned to each job. True or false 2- J&A Corporation has a monthly target operating income of $35,000. Variable expenses are 30% of sales and monthly fixed expenses are $7,000. What is the monthly margin of safety in dollars if the business achieves its operating income goal? A) $60,000 B) $70,000 C) $50,000 D) $21,000 3- At Dwight Incorporated, total fixed and variable costs are $430,000 at a production...
What costs are treated as product costs under direct costing? a. Only direct costs b. Only...
What costs are treated as product costs under direct costing? a. Only direct costs b. Only variable manufacturing costs c. All variable costs d. All variable and fixed manufacturing costs A study that highlights the significant cost and revenue data between two alternatives is a(n): a. Cost analysis b. Income analysis c. Differential analysis d. Distribution analysis
Variable costs: [[selectone]] a. can always be traced directly to the cost object b. include most...
Variable costs: [[selectone]] a. can always be traced directly to the cost object b. include most personnel costs and depreciation on machinery c. the cost per unit will not change with changing the production volume within the relevant range d. are always indirect costs
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT