Respuesta :
1.
Direct labor cost = $14760
This is 30% of total conversion cost so, conversion cost = 14760/30%
= $49200
Total conversion cost = Direct labor + Manufacturing overhead
Manufacturing overhead = Total conversion cost - Direct labor
=49200-14760 = $34440
Hence, The total manufacturing overhead cost= $34440
2.
Direct labor = $14760
This is 40% of prime cost. So total prime cost = 14760/40%
= $36900
Total prime cost = Direct material + Direct labor
Direct material = Total prime cost - Direct labor
= 36900 - 14760 = 22140
Hence, the total direct materials cost = $22140
3.
Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead
= 22140+14760+34440 = $71340
4.
Variable selling and administrative cost = 5% of 123000
=$ 6150
5.
Total variable cost = Direct materials + Direct labor + Sales commission
= 22140 + 14760 + 6150 =$43050
6.
Fixed selling and administrative expense = Total selling and administrative expense - Sales commission = 18450-6150 = $12300
Total fixed cost = Manufacturing overheads + Fixed selling and administrative expense
= 34440+12300 = $46740
7.
Total contribution margin = Sales - Total variable cost
= 123000 - 43050 = $79950
1. The total manufacturing overhead cost is $34,440.
2. The total direct material cost is $22,140.
3. The total manufacturing cost is $71,340.
4. The total variable selling and administrative cost is $6,150.
5. The total variable cost is $43,050.
6. The total fixed cost is $46,740.
7. The total contribution margin is $79,950.
Further Explanation:
Total manufacturing cost:
The total manufacturing cost is the total cost of producing a product. It includes the material cost, labor cost and other manufacturing overheads that are used in the production of the goods.
1. Total manufacturing overhead cost:
[tex]\begin{aligned}\text{Manufacturing overhead}&=\text{Total conversion cost}-\text{Direct labor}\\&=\left\{\dfrac{\text{Direct labor}}{\text{Conversion rate}}\right\}-\text{Direct labor}\\&=\left\{\dfrac{\text{\$14,760}}{\text{30\%}}\right\}-\text{\$14,760}\\&=\$34,440\end{aligned}[/tex]
Thus, the total manufacturing overhead cost is $34,440.
2. Total direct material cost:
[tex]\begin{aligned}\text{Direct material}&=\text{Total prime cost}-\text{Direct labor}\\&=\left\{\dfrac{\text{Direct labor}}{\text{Conversion rate}}\right\}-\text{Direct labor}\\&=\left\{\dfrac{\text{\$14,760}}{\text{40\%}}\right\}-\text{\$14,760}\\&=\$22,140\end{aligned}[/tex]
Thus, the total direct material cost is $22,140.
3. Total manufacturing cost:
[tex]\begin{aligned}\text{Total manufacturing cost}&=\text{Direct materials}+\text{Direct labor}+\text{Manufacturing overhead}\\&=\$22,140+\$14,760+\$34,440\\&=$71,340\end{aligned}[/tex]
Thus, the total manufacturing cost is $71,340.
4. Total variable selling and administrative cost:
[tex]\begin{aligned}\text{Total variable selling and administrative cost}&=\text{Total sales}\times{\text{Sales commission rate}}\\&=\$123,000\times{5}\%\\&=\$6,150\end{aligned}[/tex]
Thus, the total variable selling and administrative cost is $6,150.
5. Total variable cost:
[tex]\begin{aligned}\text{Total variable cost}&=\text{Direct materials}+\text{Direct labor}+\text{Salescommission}\\&=\$22,140+\$14,760+\$6,150\\&=\$43,050\end{aligned}[/tex]
Thus, the total variable cost is $43,050.
6. Total fixed cost:
[tex]\begin{aligned}\text{Total fixed cost}&=\text{Manufacturing overhead}+\text{Fixed selling and administrative expense}\\&=\text{Manufacturing overhead}\\&\:\:\:\:+\text{[Total selling and administrative expense-Sales commission]}\\&=\$34,440+[\$18,450-\$6,150]\\&=\$46,740\end{aligned}[/tex]
Thus, the total fixed cost is $46,740.
7. Total contribution margin:
[tex]\begin{aligned}\text{Total contribution margin}&=\text{Total sales}-\text{Total variable cost}\\&=\$123,000-\$43,050\\&=\$79,950\end{aligned}[/tex]
Thus, the total contribution margin is $79,950.
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Answer details:
Grade: Middle school
Subject: Cost accounting
Chapter: Cost allocation
Keywords: Miller, Company, total sales, direct labor cost, conversion cost, total prime cost, selling and administrative expense, variable selling and administrative expense, sales commission, inventories, manufacturing overhead, fixed costs, total manufacturing overhead cost, direct materials cost, total manufacturing cost, total variable selling and administrative cost, variable cost, fixed cost, contribution margin.
