Question
Heritage Company manufactures a beautiful bookcase that enjoys widespread popularity. The company has a backlog of orders that is large enough to keep production going
Heritage Company manufactures a beautiful bookcase that enjoys widespread popularity. The company has a backlog of orders that is large enough to keep production going indefinitely at the plant's full capacity of 4,000 bookcases per year. Annual cost data at full capacity follow: |
Direct materials used (wood and glass) | $ | 434,000 |
Administrative office salaries | $ | 106,000 |
Factory supervision | $ | 66,000 |
Sales commissions | $ | 63,000 |
Depreciation, factory building | $ | 104,000 |
Depreciation, administrative office equipment | $ | 2,000 |
Indirect materials, factory | $ | 16,000 |
Factory labor (cutting and assembly) | $ | 88,000 |
Advertising | $ | 103,000 |
Insurance, factory | $ | 5,000 |
Administrative office supplies (billing) | $ | 5,000 |
Property taxes, factory | $ | 17,000 |
Utilities, factory | $ | 46,000 |
|
Required: | |
1. | Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as either variable or fixed with respect to the number of units produced and sold; and second, as either aselling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) |
Cost Behavior | Selling or | Product Cost | |||
| Administrative | | |||
Cost Item | Variable | Fixed | Cost | Direct | Indirect |
Direct materials used (wood, glass) | $ | $ | $ | $ | $ |
Administrative office salaries | |||||
Factory supervision | |||||
Sales commissions | |||||
Depreciation, factory building | |||||
Depreciation, admin. office equipment | |||||
Indirect materials, factory | |||||
Factory labor (cutting and assembly) | |||||
Advertising | |||||
Insurance, factory | |||||
Administrative office supplies (billing) | |||||
Property taxes, factory | |||||
Utilities, factory | |||||
| | | | | |
Total costs | $ | $ | $ | $ | $ |
| | | | | |
|
2. | Compute the average product cost per bookcase. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) |
Average product cost | $ | per bookcase |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started