Question

The following costs were incurred in April:

Direct materials	$45,700
Direct labor	$35,700
Manufacturing overhead	$30,500
Selling expenses	$26,800
Administrative expenses	$38,000

A. Conversion costs during the month totaled?

	$32,300
Manufacturing overhead	$26,700
Selling expenses	$17,900
Administrative expenses	$34,100

B.

Calip Corporation, a merchandising company, reported the following results for October:

Sales	$411,000
Cost of goods sold (all variable)	$174,300
Total variable selling expense	$26,200
Total fixed selling expense	$23,800
Total variable administrative expense	$15,700
Total fixed administrative expense	$38,700

B. The contribution margin for October is:

C. At a sales volume of 44,500 units, Carne Company's sales commissions (a cost that is variable with respect to sales volume) total $640,800.

To the nearest whole dollar, what should be the total sales commissions at a sales volume of 41,300 units? (Assume that this sales volume is within the relevant range.) (Do not round intermediate calculations.)

Answer 1

A

With reference to table showing costs in April, Conversion cost is a total of direct labour cost and manufacturing overhead costs

35700 + 30500 = 66200

The second table has a blank against 32300, is that direct labour cost? If yes, then the same applies, Conversion cost is a total of direct labour cost and manufacturing overhead costs

B

Contribution margin = Selling price - Variable cost

Refering to Table for the month of October,

Sales 411000

less: cost of goods sold (all variable)

less: variable selling expense

less: variable administrative expense

Contribution Margin 194800

C

Sales commission per unit = Total sales commission / sales units

640800 / 44500

14.4

Since the assumption to be taken is that sales volume is within the relevant range

Total sales commission for 41300 units is

41300 * 14.4

594720