Cooper's manufacturing costing system uses a three-part classification of direct materials, direct manufacturing labor, and manufacturing overhead costs. The following items (in millions) pertain to Cooper Corporation: Click the icon to view the items.) (Click the icon to view the partial schedule of cost of goods manufactured.) Read the requirements. Requirement 1. Calculate total prime costs and total conversion costs. Total prime costs million Total conversion costs million Requirement 2. Calculate total inventoriable costs and period costs. Total inventoriable costs million Period costs million Requirement 3. Design costs and R&D costs are not considered product costs for financial statement purposes. When might some of these costs be regarded as product costs? Give an example. A. Preparing financial statements for external reporting under Generally Accepted Accounting Principles (GAAP). Under GAAP, design costs and R&D costs can be assigned to inventories although internal management reports must exclude these nonmanufacturing costs. O B. Contracting with government agencies. For example, if the Air Force negotiated to contract with a company to build a new type of supersonic fighter plane, design costs and R&D costs may be included in the contract as product costs. O C. Contracting with government agencies. For example, if the Department of Energy negotiated a project with a contractor and the design costs and R&D costs are not closely related to delivering products under the contract. O D. None of the above. Design costs and R&D costs can never be regarded as product costs. Requirement 4. Suppose that both the direct materials used and the depreciation on plant and equipment are related to the manufacture of 1 million units of product. Determine the unit cost for the direct materials assigned to those units and the unit cost for depreciation on plant and equipment. Assume that yearly depreciation is computed on a straight-line basis. Begin by determining the formula used to calculate the unit cost for direct materials. = Unit cost Now calculate the unit cost for direct materials and the unit cost for depreciation on plant and equipment. Use the same logic that you used in determining the formula for direct materials unit cost, when you calculate the depreciation unit cost. (Enter unit cost in dollars. Round your answers to the nearest cent.) Calculator Time Remaining: 02:47:27 NextCoo-ers manufacturing costing system uses a threepart classication of direct materials, direct manufacturing labor, and manufacturing overhead costs. The following items (in millions) pertain to Cooper Corporation: Read the uiremenb. Click the icon to view the items.) a (Click the icon to view the partial schedule of cost of goods manufactured) Direct materials used unit cost Depreciation unit cost Requirement 5. Assume that the implied cost-behavior patterns in requirement 4 persist. That is, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a xed cost. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product, Determine the effect on total costs. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product. (Enter unit cost in dollars. Round your answers to the nearest cent.) Direct materials used unit cost Depreciation unit cost Determine the effect on total costs. Total direct materials would V and total depreciation costs would ll. Requirement 6. Assume that depreciation on the equipment (but not the plant) is computed based on the number of units produced because the equipment deteriorates with units produced The depreciation rate on equipment is $6.00 per unit. Calculate the depreciation on equipment assuming (a) 1 million units of product are produced and (b) 2 million units of product are produced. Begin by determining the formula used to calculate the depreciation on equipment. x Calculate the depreciation on equipment assuming: (Do not round intermediary calculations. Enter answers in millions rounded to two decimal places, $X.XX million.) (a) 1 million units of product are produced, the depreciation would be (b) 2 million units of product are produced. the depreciation would then be Calculator million. million. Depreciation on equipment (9 Time Remaining: 02:47:06 m E Test: Exam 1 Question 26 of 27 This test: 145 point(s) possible This question: 15 point(s) possible Submit test Cooper's manufacturing costing system uses a three-part classification of direct materials, direct manufacturing lab (Click the icon to view the items.) (Click the icon to view the partial schedule of cost of goods - X Data table Read the requirements. For Specific Date Work-in-process inventory, January 1, 2020 $ 14 Direct ma Direct materials inventory, December 31, 2020 4 Deprecia - X Reference Finished-goods inventory, December 31, 2020 13 Requiren erial co Accounts payable, December 31, 2020 23 requireme Deterr Accounts receivable, January 1, 2020 55 Repeat th Partial Schedule of Cost of Goods Manufactured of 2 m Work-in-process inventory, December 31, 2020 6 Direct ma (in millions) Finished-goods inventory, January 1, 2020 47 Deprecia Direct materials used $ 123 Accounts receivable, December 31, 2020 35 Direct manufacturing labor costs 46 Determine Accounts payable, January 1, 2020 48 68 Total indirect manufacturing overhead costs Direct materials inventory, January 1, 2020 38 Total dire Manufacturing costs incurred during 2020 237 For Year 2020 Requiren Add: Beginning work-in-process inventory, Jan. 1, 2020 14 umber Plant utilities $ 2 Calculate on unit Total manufacturing costs to account for 251 Indirect manufacturing labor 29 Begin by Less: Ending work-in-process inventory, Dec. 31, 2020 6 Depreciation-plant and equipment 7 Cost of goods manfactured $ 245 on on Revenues 356 in milli Miscellaneous manufacturing overhead 18 Calculate Marketing, distribution, and customer-service costs 91 (a) 1 milli Direct materials purchased 89 Print Done (b) 2 milli Print Done CalculatorCooper's manufacturing costing system uses a three-part classification of direct materials, direct manufacturing lab X (Click the icon to view the items.) (Click the icon to view the partial schedule of cost of goods - Data table Read the requirements. Finished-goods inventory, December 31, 2020 13 Accounts payable, December 31, 2020 23 Direct ma Accounts receivable, January 1, 2020 55 Deprecia - X Work-in-process inventory, December 31, 2020 6 Reference Requiren Finished-goods inventory, January 1, 2020 47 erial co requireme Deterr Accounts receivable, December 31, 2020 35 Repeat th Partial Schedule of Cost of Goods Manufactured of 2 m Accounts payable, January 1, 2020 48 (in millions) Direct materials inventory, January 1, 2020 38 Direct ma Deprecia Direct materials used $ 123 For Year 2020 Direct manufacturing labor costs 46 Plant utilities $ 2 Determing 68 29 Total indirect manufacturing overhead costs Indirect manufacturing labor Total dire Manufacturing costs incurred during 2020 237 Depreciation-plant and equipment 7 356 Requiren Revenues Add: Beginning work-in-process inventory, Jan. 1, 2020 14 umber Calculate on unit Miscellaneous manufacturing overhead 18 Total manufacturing costs to account for 251 Begin by 91 Less: Ending work-in-process inventory, Dec. 31, 2020 6 Marketing, distribution, and customer-service costs Direct materials purchased 89 $ 245 on on Cost of goods manfactured Direct manufacturing labor 46 Calculate in milli Plant supplies used 9 W (a) 1 milli Property taxes on plant Print Done (b) 2 milli Print Done Calculator