Answer:
a) direct manufacturing cost $220,000
b) indirect manufacturing cost $130,000
2 a) the manufacturing department cost will be of $350,000
b) zero as direct material, labor and overhead can be determinated.
3) a) $40,000
b) $50,000 advertizement.
4) No as we can set the object cost to determinate the direct and indirect cost of the adminsitrative expenses.
Explanation:
a) The direct manufacturing cost will be the variable manufacturing cost linked to the unit cost:
Materials $7 + Labor $4 = $11 per unit
20,000 units x $11.00 = $ 220,000
b) indirect manufacturing cost will be the overhead.
20,000 x ($1.5 + $5) = 130,000
2)
a) Materials, labor and overhead.
which totals for 350,000
2 b) all the manufacturing cost are traceable so zero.
3)
fixed selling
20,000 x 3.5 = 70,000
less 50,000 advertizement = 20,000
variable sales:
commisions $1 x 20,000 + 20,000 = 40,000 direct cost (sales persons)
b) the indirect cost will be the advertizement as cannot be linked directly to the sales person cost.
