Cost Accounting

Topics: Variable cost, Costs, Total cost Pages: 3 (564 words) Published: June 12, 2013

1. Determination of per Unit Total Costs. The estimated unit costs for Hoteling Industries, when operating at a production and sales level of 10,000 units, are as follows:

Cost ItemEstimated Unit Cost
Direct materials$15
Direct labor10
Variable factory overhead8
Fixed factory overhead5
Variable marketing4
Fixed marketing3


(1)Identify the estimated conversion cost per unit.
(2)Identify the estimated prime cost per unit.
(3)Determine the estimated total variable cost per unit.
(4)Compute the total cost that would be incurred during a month with a production level of 10,000 units and a sales level of 12,000 units.

2. Components of Manufacturing Cost. ANTI KKN Inc. produces video cameras. The direct labor cost of one camera is $200, and the total manufacturing cost is $650. The overhead cost of one camera is two-thirds as large as its conversion cost.


(1)Compute the conversion cost per unit.
(2)Determine the factory overhead cost per unit.
(3)Determine the direct materials cost per unit.

3. A company allocates its variable factory overhead based on direct labor hours. During the past three months, the actual direct labor hours and the total factory overhead allocated were as follows:

OctoberNovemberDecember Direct labor hours2,5003,0005,000
Total factory overhead allocated$80,000$75,000$100,000

Based upon this information, the estimated variable cost per direct labor hour was (high low method): A.$.125
E.none of the above

4. For a simple regression-analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation on the y-axis is $50,000. The slope of the trend line is .20. The independent variable, factory wages, amounts to $900,000 for the month. What is the estimated amount of...
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