Express the digital voice recorder cost cost formula

Problem Question 1

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

Solution:

e. fixed administrative expense :- Costs that are constant and the example would be president's salary.

f. fixed indirect selling expense:- Expenses which are not directly related to sales and the example would be sales manager's salary.

Problem Question 2

The total cost is:

Direct Material 56,936

Cost per pair = 196,896/11,720 = $16.80 per pair

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.

Direct Labor hours* $15 = $173,250

Direct Labor hours = $173,250 / $15 = 11,550 Hours

1) Rate

2) Hours

Calculation of the cost per unit of a production runs of 4,260 toy flutes

Closing inventory units = Total units - Units sold

4,260 units – 3,930 units = 330 units

Materials handling $325,000 number of parts used $0.25 per part
Cutting and lathe work 2,340,000 number of parts used 1.80 per part
Assembly &inspection 5,000,000 direct labor hours 25.00 per hr

The following production, costs and activities occurred during the month of march:

The total manufacturing overheads applied to product using activity based costing is $ 4,466,380. Now calculate the total manufacturing costs and cost per unit of the product for 3,800 units produced.

c. compare the per unit cost figures calculated in parts a and b. which approach do you think provides better information for manufacturing managers? Explain your answers.

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.

Problem question 6

b. if 20,400 of these recorders were in finished goods inventory at the end of 2008, by how much and in what direction ( higher or lower) would 2008 cost of goods sold be different under costing than under absorption costing?

Answer:- Inventory under Variable costing :

$ 29.8 per unit * 20,400 units = $ 607,920

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