Question
7. Dapper Corporation had only one job in process on May 1. The job had been charged with $1,680 of direct materials, $3,920 of direct
7. Dapper Corporation had only one job in process on May 1. The job had been charged with $1,680 of direct materials, $3,920 of direct labor, and $5,750 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.20 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 10,900 Purchased during the month $26,100 Used in production $32,500 Labor: Direct labor-hours worked during the month 1,650 Direct labor cost incurred $21,120 Actual manufacturing overhead costs incurred $36,100 Inventories: Raw materials, May 30 ? Work in process, May 30 $18,100 Work in process inventory on May 30 contains $2,560 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The balance in the raw materials inventory account on May 30 was: $4,620 $4,380 $5,020 $4,500 10. Dybala Corporation's produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $180 100% Variable expenses 90 50% Contribution margin $ 90 50% The company is currently selling 5,300 units per month. Fixed expenses are $420,100 per month. The marketing manager believes that a $6,300 increase in the monthly advertising budget would result in a 160 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? Decrease of $6,300 Increase of $14,400 Decrease of $8,100 Increase of $8,100
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