Explain unit cost and total cost relationships. (Obj. 1). At the Shelby Company, indirect materials are purely
Question:
Explain unit cost and total cost relationships. (Obj. 1). At the Shelby Company, indirect materials are purely variable costs, varying in proportion to direct labor hours worked at the rate of $.80 per direct labor hour.
a. Compute the total indirect materials cost for each of the following four levels of activity:
(1) 16,212 direct labor hours
(2) 18,714 direct labor hours
(3) 20,800 direct labor hours
(4) 28,714 direct labor hours
b. What is the effect of increases in direct labor hours on the total cost of indirect materials?
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Related Book For 
Cost Accounting Principles And Applications
ISBN: 9780028034287
6th Edition
Authors: Horace R. Brock, Linda Herrington
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