Cost Formula The following amaunts of various cost categories are experienced by
ID: 2542954 • Letter: C
Question
Cost Formula The following amaunts of various cost categories are experienced by Columbia Factories in producing and selling its only product: Direct material Direct labor Manufacturing overhead $12,000+ $4.00 per direct labor hour Selling expenses Administrative *Each unit of product requires one-half direct labor hour. Combine the various cost factors into a general total cost formula for Columbia Factories and determine the total cost of producing and selling 21,000 units. $8.00 per unit of product $10.00 per direct labor hour* s14,000 $3.00 per unit of product $7,000+ s0.50 per unit of product Fixed costs Variable costs Total cost Direct material Direct labor Manufacturing overhead Selling expenses Administrative Total cost CheckExplanation / Answer
Total direct labour hour = 21000 * 0.5 = 10500
Fixed cost
Variable cost
Total cost
Direct material
0
21,000x8=$168,000
168000
Direct labor
0
10,500x10=$105000
105000
Man. Overhead
$12,000
10,500x4=$42,000
54000
Sales Overhead
$14,000
21,000x3=$63,000
77000
Administrative exp
$7,000
21,000x0.5=$10,500
17500
Total
33000
388500
421500
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Fixed cost
Variable cost
Total cost
Direct material
0
21,000x8=$168,000
168000
Direct labor
0
10,500x10=$105000
105000
Man. Overhead
$12,000
10,500x4=$42,000
54000
Sales Overhead
$14,000
21,000x3=$63,000
77000
Administrative exp
$7,000
21,000x0.5=$10,500
17500
Total
33000
388500
421500