Answer:
A. Particular Direct Indirect Variable Fixed
1 Wages of Assembly Yes No Yes No
2 Deprecation of plant & No Yes No Yes
Machinery
3 Glue & Thread No No Yes No
4 Outbound Shipping Cost No Yes No Yes
5 Raw Material Handling Cost Yes No Yes No
6 Salary Of Public Relations No Yes No Yes
manager
7 Production Run Setup Costs Yes No Yes No
8 Plant Utilities Yes No Yes No
9 Electricity cost of retail stores No Yes Yes No
10 Research and development No Yes No Yes
expense
B. Product-Costing
i. Manufacturing Cost Per Machine Hour = Total Manufacturing overhead / Total Machine Hours
Manufacturing Cost Per Machine Hour = 359,520.00 / 21,400.00
Manufacturing Cost Per Machine Hour = 16.80
ii. Particular Amount
Raw Material $6,240
Direct Labor Cost <u>$9,165</u>
$15,405
Manufacturing overhead $13,104
(780 hours* $16.80) <u> </u>
Total Cost of 3900 Hats <u>$28509</u>
Thus, the Cost of One hat = $28509 / 3900 hat = $7.31 per hat
iii. Total Hats made During the Month Of April 3,900
Less: Closing Inventory <u>1,050</u>
Sold During the month of April <u>2,850</u>
Cost Of Hats Sold During the month of April
= 2,850 * $7.31
= $20,833.5
Cost of Closing Stock (1,050 hat) = 1,050 hat * $7.31 = 7675.5
