Answer:
Option (a) is correct.
Explanation:
Manufacturing cost:
= Direct materials + Direct labor + Variable overhead + Fixed overhead
= $80,000 + $100,000 + $30,000 + $60,000
= $270,000
Purchase from outside:
= Fixed overhead + Purchase price
= $60,000 + (50,000 × $10)
= $60,000 + $500,000
= $560,000
Effect on income = Purchase from outside - Manufacturing cost
= $560,000 - $270,000
= $290,000
Therefore, the above calculations shows that income will decrease by $290,000.
Answer:
D) $128 per unit
Explanation:
The computation of the unit product cost using the absorption costing is shown below:
= Direct materials per unit + direct labor per unit + Variable manufacturing overhead per unit + fixed manufacturing overhead per unit
= $51 + $12 + $2 + ($441,000 ÷ 7,000 units)
= $128
We simply added the direct material, direct labor, variable manufacturing overhead per unit, and the fixed manufacturing overhead per unit
Answer:
The correct options are:
A. Debit to Factory Overhead
D. Credit to Factory Utilities Payable
Explanation:
The debit entry of the use of utilities in a factory would be recorded in factory overhead since cost of utilities is a not a direct factory cost.
However, the corresponding credit would be in the factory utilities payable as an obligation awaiting payment to be made to the supplier of the service being enjoyed by the factory in order to run on daily basis
Answer:
c
Explanation:
because it is not possible