Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:

Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:

Direct materials				$	71,000
Direct labor				$	36,000
Variable manufacturing overhead	$	15,800
Fixed manufacturing overhead		28,600
Total manufacturing overhead				$	44,400
Variable selling expense	$	12,400
Fixed selling expense		18,800
Total selling expense				$	31,200
Variable administrative expense	$	4,200
Fixed administrative expense		25,400
Total administrative expense				$	29,600

Required:

1. With respect to cost classifications for preparing financial statements:

a. What is the total product cost?

b. What is the total period cost? 

2. With respect to cost classifications for assigning costs to cost objects:

a. What is total direct manufacturing cost? 

b. What is the total indirect manufacturing cost? 

3. With respect to cost classifications for manufacturers:

a. What is the total manufacturing cost? 

b. What is the total nonmanufacturing cost? 

c. What is the total conversion cost and prime cost?

4. With respect to cost classifications for predicting cost behavior:

a. What is the total variable manufacturing cost? 

b. What is the total fixed cost for the company as a whole? 

c. What is the variable cost per unit produced and sold? 

5. With respect to cost classifications for decision making:

a. If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?

Explanation

1a.

The total product cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Total manufacturing overhead		44,400
Total product cost	$	151,400

1b.

The total period cost is computed as follows:

Total selling expense	$	31,200
Total administrative expense		29,600
Total period cost	$	60,800

2a.

The total direct manufacturing cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Total direct manufacturing cost	$	107,000

2b.

The total indirect manufacturing cost is computed as follows:

Variable manufacturing overhead	$	15,800
Fixed manufacturing overhead		28,600
Total indirect manufacturing cost	$	44,400

3a.

The total manufacturing cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Total manufacturing overhead		44,400
Total manufacturing cost	$	151,400

3b.

The total nonmanufacturing cost is computed as follows:

Total selling expense	$	31,200
Total administrative expense		29,600
Total nonmanufacturing cost	$	60,800

3c.

The total conversion cost is computed as follows:

Direct labor	$	36,000
Total manufacturing overhead		44,400
Total conversion cost	$	80,400

The total prime cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Total prime cost	$	107,000

4a.

The total variable manufacturing cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Variable manufacturing overhead		15,800
Total variable manufacturing cost	$	122,800

4b.

The total amount of fixed cost for the company as a whole is computed as follows:

Fixed manufacturing overhead	$	28,600
Fixed selling expense		18,800
Fixed administrative expense		25,400
Total fixed cost	$	72,800

4c.

The variable cost per unit produced and sold is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Total variable manufacturing overhead		15,800
Variable selling expense		12,400
Variable administrative expense		4,200
Total variable cost (a)	$	139,400
Number of units produced and sold (b)		1,000
Variable cost per unit produced and sold (a) ÷ (b)	$	139

5a.

The incremental manufacturing cost is computed as follows:

Direct materials	$	71,000
Direct labor		36,000
Variable manufacturing overhead		15,800
Total incremental cost (a)	$	122,800
Number of units produced and sold (b)		1,000
Incremental cost per unit produced (a) ÷ (b)	$	123

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