Answer:
(1) Depreciation on factory equipment. ____MOH
(2) Depreciation on delivery trucks. ____ Period Cost
(3) Wood used to build a bookcase. ____Direct Material
(4) Production supervisor’s salary. ____ MOH
(5) Glue and screws used in the bookcases. ____ MOH
(6) Wages of persons who assemble the bookcases. ____Direct Labor
(7) Cost to run an ad on local radio stations. ____Period Cost
(8) Rent for the factory. ____ MOH
(9) CEO’s salary. ____ Period Cost
(10) Wages of person who sands the wood after it is cut.
Direct Labor
Period Cost are costs that are not directly involved in the manufacturing costs of a product but are incurred in a particular period. These expenses include advertising and selling expenses.
Direct Materials are material used to make a product . For example wood is a direct material for making shelves.
Direct Labor are the wages paid to the people who work in the production of a product.
Manufacturing Overheads are charges associated with the manufacturing of a product.they are indirect costs of the production like rent of the building etc.
Answer:
C: ability to set your own hours of operation
Explanation:
With a chain restaurant you have to have the same hours as other restaurants in that chain.
Answer:
$810,000
Explanation:
The computation is shown below:
The increase in fixed cost is
= Salary of each sales representative × number of sales representatives hired
= $45,000 × 18
= $810,000
Now the increase in sales needed for break even is
= Increase in fixed cost ÷ Contribution margin ratio
= $810,000 ÷ 30%
= $2,700,000
As we know that break even sales is computed by dividing the fixed cost by the contribution margin ratio and we applied the same
Answer:
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Generally, an activity-based costing uses multiple cost pools such as manufacturing cost or customer services and multiple cost drivers such as direct labor hours worked, number of changes used in engineering department, etc.
Cost pool is simply the amount of money spent by a firm on a particular activity.
Hence, to assign overhead costs to each product, the company multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
In activity-based costing, the activity rate for an activity cost pool is calculated by using the following formula;
Activity rate = total overhead cost/activity for the activity cost pool.
Answer:
Annual depreciation= $2,700
Explanation:
Giving the following information:
Morgan Co. purchased a truck that cost $32,000. The truck had an expected useful life of 10 years and a $5,000 salvage value.
The straight-line depreciation method provides an annual depreciation expense by dividing the book value by the number of useful years.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (32,000 - 5,000)/10= $2,700
