Question

Miller Company’s total sales are $174,000. The company’s direct labor cost is $20,880, which represents 30%...

Miller Company’s total sales are $174,000. The company’s direct labor cost is $20,880, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $26,100 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?

Homework Answers

Answer #1
1 Total Manufactoring Over head cost
Direct labor cost                       20,880
Conversion Cost(%) 30%
Total Conversion Cost                       69,600
Total Manufactoring Over head cost(69600-20880)                       48,720
2 Direct Materal Cost
Direct labor cost                       20,880
Prime Cost(%) 40%
Total Prime Cost                       52,200
Direct Materal Cost(52200-20880)                       31,320
3 Manufactoring cost
Direct Materal Cost                       31,320
Direct labor cost                       20,880
Manufactoring Overhead cost                       48,720
Total Manufactoring cost                    100,920
4 total selling and administrative expense                       26,100
Variable selling and administrative expense                         8,700
174000*5%
5 Total Variable expenses
Direct Materal Cost                       31,320
Direct labor cost                       20,880
Variable selling and administrative expense                         8,700
Total                       60,900
6 Manufactoring Overhead cost                       48,720
Fixed selling and administrative expense 26100-8700                       17,400
Total                       66,120
7 Contribution margin
Sales                    174,000
Less Variable cost                       60,900
Contribution margin                    113,100
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