Express the digital voice recorder cost cost formula
| Question And Answer |
|---|
| By- Abhinav Kumar Sinha |
E13.6
College carriers manufactures backpacks that are sold to students for
use as book bags.
Identify a specific item in this company's manufacturing, selling or
administrative processes for which the costs would be classified
as
a. raw materials
b. direct labor
c. variable manufacturing overhead
d. fixed manufacturing overhead
e. fixed administrative expense
f. fixed indirect selling expense
g. variable direct selling expense
Answer:- a. raw materials :- These would be the material that would go in the backpack and so the items would be fabric, zipper, shoulder straps.
f. fixed indirect selling expense:- Expenses which are not directly related to sales and the example would be sales manager's salary.
g. variable direct selling expense:- Expenses which vary directly with sales and the example would be sales force commissions.
Direct Material 56,936
Direct Labor 57,600
c. at the end of January 3,156 pairs of shoes were in ending inventory.
Calculate the cost of the ending inventory and the cost of the shoes
sold during January.
Cost of ending inventory = 3,156 X 16.80 = $53,020.80
DL hours = $173,250 / $15 = 11,550 Hours
b. actual manufacturing overhead costs incurred during November totaled $166,425. Calculate the amount of over-or under applied overhead for November.
2) Hours
d. explain the account appropriate for the over-or under applied
overhead at the end of November
4,260 units – 3,930 units = 330 units
Total cost = $ 2.285915 per unit
The following production, costs and activities occurred during the month of march:
| Units Produced | Direct materials costs | Number of parts used | direct labor hrs |
|---|---|---|---|
| 3,800 | $142,000 | 83,600 | 17,180 |
a. calculate the total manufacturing costs and the cost per unit of the windows produced during the month of march (using the activity-based costing approach)
| Particulars | Total cost | Cost per unit (3,800 units) |
|---|---|---|
| Direct material cost | $ 142,000 | $ 37.368421 |
| Direct labor costs (17,180 hours * $20 per hr) | $ 343,600 | $ 90.421053 |
| Prime cost | $ 485,600 | $ 127.789474 |
| Manufacturing overhead | $ 7,665,000 | $ 2,017.105262 |
| Total cost | $ 8,150,600 | $ 2,144.894736 |
The traditional costing method (part a) allocates more windows costs then ABC (part b) allocates, so the part b in the better option for the manufacturing managers to adopt the activity based costing method because the actual cost for per window is $ 1,303.152631 is less than the traditional cost of $ 2,144.894736, the ABC shows the realistic cost and it improve the cost of production as cost increases profits decreases, so then better option is Activity based costing.
P13.18
Millan, inc. manufactures digital voice recorders. During 2008, total
costs associated with manufacturing 208,000 of the new MV-5253 model
(introduced this yr) were as follows:
| Particulars | Variable Costing | 2,08,000 units | Absorption Costing | 2,08,000 units |
|---|---|---|---|---|
| Total | Per unit | Total | Per unit | |
| Raw materials | $1,788,800 | $ 8.6 | $1,788,800 | $ 8.6 |
| Direct labor | 2,953,600 | $ 14.2 | 2,953,600 | $ 14.2 |
| Variable manufacturing overhead | 748,800 | $ 3.6 | 748,800 | $ 3.6 |
| Fixed manufacturing overhead | - | - | 707,200 | $ 3.4 |
| Total Production Cost | $ 5,491,200 | $ 26.4 | $ 6,198,400 | $ 29.8 |
Answer:- Inventory under Variable costing :
Total Variable cost = $ 26.4 per unit
As per Variable costing the value of finished goods is $ 528,560 and as per absorption costing the value of finished goods is $ 607,920
c. express the digital voice recorder cost in a cost formula. What does
these formula suggests the total of making an additional 1,700 recorders
would be?
