Listed below are several costs incurred during the year. For each cost match the classification that best describes this cost. • Plant insurance costs of Nespresso. • Sales commissions paid to the sales force of X-cite Kuwait. • Tire costs incurred by Tesla Motor Company. ✓ Choose... Period cost Manufacturing Overhead Direct material Choose...

Listed below are several costs incurred during the year. For each cost match the classification that best describes this cost. • Plant insurance costs of Nespresso. • Sales commissions paid to the sales force of X-cite Kuwait. • Tire costs incurred by Tesla Motor Company. ✓ Choose... Period cost Manufacturing Overhead Direct material Choose...

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory Indicate whether each period cost is a selling expense or an administrative expense. Costs a. Annual bonus paid to the chief financial officer of the company b. Annual fee to a celebrity to promote the aircraft c. Cost of electronic guidance system installed in the airplane cockpit d. Cost of the flight data recorder (the black box) for the airplane e. Cost of normal scrap from production of the airplane body f. Cost of small replicas of the airplane used to promote and market the airplane g. Cost of paving the headquarters employee parking lot h. Decals for cockpit door, the cost of which is immaterial to the cost of the final product 1. Depreciation on factory equipment j. Hourly wages for janitorial staff for the factory k. Hydraulic pumps used in the airplane's flight control system 1. Instrument panel installed in the…
Fixed manufacturing overhead is assigned to units of production based on a predetermined rate using a normal production capacity of 200,000 units per year. a. What is the estimated annual fixed manufacturing overhead ? If estimated fixed overhead is equal to actual fixed overhead, what is the amount of under- or over applied overhead in 1999 under absorption costing and variable costing? b What is the product cost per unit and expense will be charged against revenues in 1999 under absorption costing and variable costing and c. Will pretax income be higher under absorption or variable costing? By what amount?
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Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Multiple Choice O $15.60. O Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 3.4 machine hours in the Assembly Department, and 4.0 direct labor hours and 0.6 machine hours in the Finishing Department? $3.40 Assembly 190,000 DLH 390,000 MH $16.10. $ 390,000 Finishing) 149,000 DLH: 95,550 MH $ 581,100
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility nearMontreal. The following table provides data concerning the company’s costs:Fixed Cost Cost per Carper Month WashedCleaning supplies ...................... $0.80Electricity .................................. $1,200 $0.15Maintenance ............................ $0.20Wages and salaries ................. $5,000 $0.30Depreciation .............................. $6,000Rent .......................................... $8,000Administrative expenses .......... $4,000 $0.10For example, electricity costs are $1,200 per month plus $0.15 per car washed. The company expects towash 9,000 cars in August and to collect an average of $4.90 per car washed.Required:Prepare the company’s planning budget for August.
Sunland Co. gathered the following information on power costs and factory machine usage for the last six months: Power Cost Factory Machine Hours $28,390 15,800 36,069 21,400 32,895 18,700 ITT 26,235 15,100 23,890 13,500 20,700 Month January February March April May June Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. (a) Your answer is correct. What is the estimated variable portion of power costs per factory machine hour? (Round answer to 2 decimal places, e.g. 15.25.) Variable power costs $ (b) eTextbook and Media * Your answer is incorrect. 10.500 Fixed power costs What is the estimated fixed power cost each month? High 1.41 per factory machine hour 20,683 $ Low Attempts: 1 of 5 used
Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 4 5 6 7 8 9 10 11 12 Multiple Choice O O о Maintenance Expense $ 3,440 O O Using the high-low method, total monthly fixed cost is calculated to be (Round final answer to full dollar amount with no decimal places): $212. $153. $520. $462. 3,630 3,810 3,940 3,940 4,320 3,930 $280. 3,740 3,460 3,080 2,940 3,200 Machine Hours 2,360 2,460 2,560 2,590 2,440 2,600 2,580 2,550 2,370 2,240 1,670 2,230
Fanning Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected Costs Direct labor Direct materials Fringe Benefits: Home 1 2 Assume Fanning needs to allocate two major overhead costs ($34,600 of employee fringe benefits and $25,740 of indirect materials costs) among the three jobs. 3 Total Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. Note: Round "Allocation rate" to 2 decimal places. Indirect Materials: Home 1 2 3 Total Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Allocation Rate Total cost Home 1 $ 71,000 92,000 $ $ $ 0.10 0.10 0.10 Allocation Rate X $ 71,000 X X X x X Home 2 $ 99,000 141,000 x X Weight of Base The cost components to determine the total cost of each house: Home 1 Home 2 $ 71,000 $ 71,000 $ 99,000 $ 176,000 Weight of Base Home 3 $ 176,000 196,000 $ 0 = = =…
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Company A produces product. The information on the number of units produced and mixed costs is provided in the table. Period Number of units produced Maintenance costs, Eur January 18 550 February 15 500 March 23 690 April 20 650 May 19 606 June 16 519 July 18 575 August 17 525 September 15 505 October 14 482 November 14 488 December 13 468 Identify the fixed element of maintenance costs according to the high-low method.
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Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 456789 10 11 12 Maintenance Expense $ 3,280 3,470 3,650 3,780 3,780 4,000 Multiple Choice O $1.44. Using the high-low method, unit variable cost is calculated to be: $1.61. $1.66. 3,770 3,580 3,300 2,960 2,860 3,040 $1.50. Machine Hours 2,280 2,380 2,480 2,510 2,360 2,530 2,500 2,470 2,290 2,160 1,770 2,150