Cost of Managerial

What is accrual accounting?

Allows a company to record revenue before receiving payment for goods/services sold or expenses are recorded as incurred before the company has paid for them.

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours. The August budget is based on 8,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:

Calculate maintenance cost Y = a+bx Y = 5300+(0.60*8000) Y = 10100 so answer is a) $10,100

What is a direct cost?

Direct costs are cost which directly attributable or only assign to a particular deparment or division.

Total manufacturing overhead cost =

Variable manufacturing overhead + Fixed manufacturing overhead

Fixed costs expressed on a per unit basis:

decrease with increases in activity.

Predetermined Overhead Rate on labor cost formula=

manufacturing overhead * 100 / direct labour cost

Predetermined Overhead rate on machine cost formula=

manufacturing overhead / machine hour

Factory overhead is typically a(n):

mixed cost xamples of factory overhead : Indirect Materials, Indirect Labor, Maintenance, Utilities etc. They are neither entirely variable, nor entirely fixed.They are mixed costs, with a variable component and a fixed component.

Depreciation on a personal computer used in the marketing department of a manufacturing company would be classified as:

period cost that is fixed with respect to the company's output. explanation: personal computer used in the marketing department will be a period cost as it has no nexus with output but directly connected with advertisement cost which is distributed evenly through out the year.

Within the relevant range, a difference between variable costs and fixed costs is:

variable costs per unit are constant and fixed costs per unit fluctuate.

Within the relevant range, variable costs can be expected to:

vary in total in direct proportion to changes in the activity level.

In the standard cost formula Y = a + bX, what does the "X" represent?

Where Y = Total Cost a = Fixed cost b = variable cost per unit X = the level of activity.

Corporate legal office salaries$ 53,900Apparel Department cost of sales—Evendale Store$ 94,000Corporate headquarters building lease$ 65,400Store manager's salary—Evendale Store$ 21,900Apparel Department sales commission—Evendale Store$ 7,350Store utilities—Evendale Store$ 20,200Apparel Department manager's salary—Evendale Store$ 9,500Central warehouse lease cost$ 19,700Janitorial costs—Evendale Store$ 11,850 1. What is the total amount of the costs listed above that are direct costs of the Apparel Department? 2. What is the total amount of the costs listed above that are direct costs of the Evendale Store? 3. What is the total amount of the Apparel Department's direct costs that are also variable costs with respect to total departmental sales?

1. 110,850 2. 164,800 3. 94,000+7,350= 101,350

Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company considers all of its manufacturing overhead costs to be fixed and it has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year$ 534,000 Estimated activity level from the beginning of the year30,000machine-hoursActual total fixed manufacturing overhead$ 487,000 Actual activity level27,400machine-hours The predetermined overhead rate per machine-hour would be closest to:

534,000/30,000

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: Cost of clay used in production$ 75,000Wages paid to the workers who paint the figurines$ 86,000Wages paid to the sales manager's secretary$ 38,000Cost of junk mail advertising$ 55,000 What is the total of the direct costs above?

75,000 + 86,000 = 161,000

Luthan Company uses a plantwide predetermined overhead rate of $23.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $277,200 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $266,000 and 11,200 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.

Applied manufacturing overhead = Actual direct labor-hours * Predetermined overhead rate 11,200 * 23.10= 258,720

Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials$ 1,000Direct labor$ 3,000Sales commissions$ 4,000Salary of production supervisor$ 2,000Indirect materials$ 400Advertising expense$ 800Rent on factory equipment$ 1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: Machine Hours:

Calculation of Manufacturing Overhead: Salary of Production Supervisor + Indirect Materials + Rent on Factory Equipment = ___ Predetermined overhead rate = Total manufacturing Overhead/ Total Estimated Machine hour. 2,000+400+ 1,000= 3400 3400/1000= 3.4

The following costs were incurred in May: Direct materials$ 40,500Direct labor$ 36,700Manufacturing overhead$ 28,800Selling expenses$ 21,400Administrative expenses$ 38,800 Conversion costs during the month totaled:

Conversion costs = Direct labor + Manufacturing overhead 65,500

The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease$ 86,000Cosmetics Department sales commissions-Northridge Store$ 5,300Corporate legal office salaries$ 57,300Store manager's salary-Northridge Store$ 11,700Heating-Northridge Store$ 14,400Cosmetics Department cost of sales-Northridge Store$ 32,400Central warehouse lease cost$ 13,900Store security-Northridge Store$ 16,300Cosmetics Department manager's salary-Northridge Store$ 4,260 The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?

Direct costs are cost which directly attributable or only assign to a particular deparment or division. 5,300+32,400+4,260= 41,960

Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: Predetermined overhead rate=

Estimated total fixed manufacturing overhead/Estimated direct labor hours 121,000/10,000= 12.10

Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours36,000 Estimated variable manufacturing overhead$ 3.01per machine-hourEstimated total fixed manufacturing overhead$ 1,058,040 The predetermined overhead rate for the recently completed year was closest to: Machine Hours

Predetermined overhead rate = (estimated variable cost + estimated fixed cost) / estimated total machine hours ((36,000*3.01)+ 1,058,040)/ 36,000= 32.4 Machine Hours

Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 22,100 hours and the total estimated manufacturing overhead was $570,180. At the end of the year, actual direct labor-hours for the year were 22,050 hours and the actual manufacturing overhead for the year was $570,180. Overhead at the end of the year was:

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $570,180 ÷ 22,100 direct labor-hours = $25.80 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $25.80 per direct labor-hour × 22,050 direct labor-hours = $568,890 Overhead over or underapplied Actual manufacturing overhead incurred$570,180Manufacturing overhead applied to Work in Process568,890Underapplied (overapplied) manufacturing overhead$ 1,290

The following costs were incurred in May: Direct materials$ 45,200Direct labor$ 29,400Manufacturing overhead$ 23,500Selling expenses$ 20,800Administrative expense$ 28,900 Prime costs during the month totaled:

Prime Costs Include all the direct material, Direct Labour Prime Cost= 74,600

Which of the following is unlikely to be classified as a fixed cost with respect to the number of units produced and sold? -Property taxes on a headquarters building. -Legal department salaries. -Cost of leasing the company's mainframe computer. -Production supplies.

Production supplies.​It is not a fixed costs, because it varies with production unlike above all are not dependent on production. So a,b,c are Fixed costs. Fixed osts means is fixed and it has to incurr even if there is no production. Even there is more production. It not dependent on no of units produced. ​The only one which is dependent on No of units producing is Production supplies

Gullett Corporation had $45,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $94,000 of raw materials. The journal entry to record the purchase of raw materials would include a:

Raw materials inventory are part of assets. Purchase of raw materials increases raw materials inventory balance. Increase in assets should be debited. Hence, raw materials accounts should be debited. Debit to Raw Materials of 94,000

Compute the amount of raw materials ( Formula)

Raw materials used = Beginning raw materials inventory + Purchases of raw materials - Ending raw materials inventory