Ask Question
BusinessBusiness
11 July, 01:21

Miller Company's total sales are $120,000. The company's direct labor cost is $15,000, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $18,000 and its only variable selling and administrative expense is a sales commission of 5% of sales. The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. Required:1. What is the total manufacturing overhead cost? 2. What is the total direct materials cost? 3. What is the total manufacturing cost? 4. What is the total variable selling and administrative cost? 5. What is the total variable cost? 6. What is the total fixed cost? 7. What is the total contribution margin?

+1
Answers (1)
  1. 11 July, 01:41
    0
    1. Total manufacturing overhead cost = $35,000

    2. Total Direct Material cost = $22,500

    3. Total manufacturing cost = $72,500

    4. Total Variable Selling and Administrative Cost = $6,000

    5. Total variable cost = $43,500

    6. Total Fixed Cost = $47,000

    7. Total contribution margin = $76,500

    Explanation:

    Provided Sales = $120,000

    Direct labor Cost = $15,000 which = 30% of total conversion cost

    Total conversion cost = $15,000/30% = $50,000

    Conversion cost = Labor cost + Manufacturing cost, manufacturing cost = $50,000 - $15,000 = $35,000

    Provided Direct labor cost is 40% of total prime cost.

    Total prime cost = Direct material + direct labor = $15,000/40% = $37,500

    Direct material = $37,500 - $15,000 = $22,500

    Provided selling and distribution expense = $18,000

    Variable = Sales commission of 5% on sales = $120,000 X 5% = $6,000

    Fixed Selling expenses = $18,000 - variable $6,000 = $12,000

    Manufacturing Overhead cost is completely fixed = $35,000

    Now we have total manufacturing cost = material + labor + manufacturing overheads = $22,500 + $15,000 + $35,000 = $72,500

    Total variable cost = Material + labor + Selling & Administration

    = $22,500 + $15,000 + $6,000 = $43,500

    Total fixed cost = Manufacturing + Selling & Administrative

    = $35,000 + $12,000 = $47,000

    Total contribution margin = Selling Value - Total Variable Cost = $120,000 - $43,500 = $76,500

    Final Answer

    1. Total manufacturing overhead cost = $35,000

    2. Total Direct Material cost = $22,500

    3. Total manufacturing cost = $72,500

    4. Total Variable Selling and Administrative Cost = $6,000

    5. Total variable cost = $43,500

    6. Total Fixed Cost = $47,000

    7. Total contribution margin = $76,500
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Miller Company's total sales are $120,000. The company's direct labor cost is $15,000, which represents 30% of its total conversion cost ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
List 4 factors that must be met to avoid interfering with the communication process
Answers (1)
Joe and Josephine have started a plumbing business. The business is incorporated, but they have not invested any money in the business, which has only minimal assets.
Answers (1)
Crane Tables paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1300 a day in wages.
Answers (1)
The difference between overhead applied to work in process and actual overhead is
Answers (1)
A small town has few available workers, and unemployment is low. A family-owned restaurant in town has just had a very good year in profits and would like to hire additional wait staff to meet higher demand.
Answers (1)
New Questions in Business
Green Glass recently pays dividends. Future dividends are projected at $2.5, $3.5, and $4.5 over the next three years, respectively. Beginning four years from now, the annual dividend is expected to grow at 4% annually forever.
Answers (1)
What are two tasks (out of several) commonly performed by operating systems?
Answers (1)
Question 2 1 pts How much is the fine for your thost offense for failure to keep insurance? $1000 $400 $200 $20
Answers (2)
A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?
Answers (1)
Which is a primary activity in Porter's value chain model? A. finance B. procurement C. human resources D. outbound logistics
Answers (1)
Home » Business » Miller Company's total sales are $120,000. The company's direct labor cost is $15,000, which represents 30% of its total conversion cost and 40% of its total prime cost.
Sign Up Forgot Password?