9.1/2: Manufacturing costs & Breakeven Point
The costs of raw materials and direct labor are called the ________________________ of manufacturing a product.
prime cost
______________________ is the original cost of the property less the total depreciation to date.
Book Value
___________________ is often used for shipping heavy, bulky goods.
Freight
Out of 9.1
the prime cost plus the factory overhead are the _________________________________ of a product
List two potential travel expenses
mileage, hotel fees, meals, airfare, transportation fares, entertaining customers
The __________________________ is the point at which income from sales equals the total cost of producing and selling goods.
breakeven point
The _____________________________ uses a fixed rate of depreciation for each year.
declining-balance method
f.o.b or free on board
Name two expenses that would qualify as factory overhead
salaries and wages of managers, supervisors, inspectors, or other workers not directly working with manufactured products
rent, depreciation, heat, power, insurance, supplies
another way to say 'per day'
per diem
An appliance factory had these costs for the goods produced in the first quarter of the year: raw materials, $1,671,680; direct labor, $2,168,320; and factory overhead, $684,850. What was the prime cost of the goods produced during the quarter? What was the total manufacturing cost of the goods? (two answers)
$3,840,000 ; $4,524,850
A truck that cost $15,000 is depreciated in value each year at the rate of 8%. What is the book value of the machine at the end of the second year using the declining-balance method?
$12,696
A company wants to ship a package that weights 10 pounds to zone 5, using National Shipping Company's two-day service (see shipping table). Insuring the package will cost $6.75 more. What is the total cost to ship the package?
$29
An office with 2,500 square feet rents for $48,000 a year. Light, heat, insurance, and maintenance are estimated to cost $4,500 a year. What is the total annual cost of this office space per square foot? If one workstation's area is 30 square ft, how much does this workstation cost per year? (two answers)
$21 ; $630
Suzie attended a business conference in another state. Her approved expenses were: airfare, $485; meals, $267; taxis, $28; airport parking, $34; transportation, $15; conference registration fee, $150; mileage to and from airport, 62 miles; hotel, $258; other expenses, $76. If her company pays $0.52 a mile for use of personal cars, how much was she reimbursed for the trip?
$1,345.24
Operating Corporation plans to produce cowlings that will be sold at $20 per unit. Manufacturing any cowlings will cost an estimated $24,000 in fixed costs. The variable costs of producing each cowling are estimated to be $10. How many cowlings must they sell to breakeven? What sales must they earn on the cowlings to reach the breakeven point? (two answers)
2,400 cowlings ; $48,000
The original cost of a stamping press was $152,600. The factory plans to use it for 5 years and then trade it in for $44,600. Find the book value of the press at the end of the first year using the sum-of-the-years-digits method.
$116,600
Crayco of Madison ships 12,635 pounds of metal bars by freight to Sisco. The freight company charges $12.49 a cwt. What is the freight charge?
$1,586.23
The total annual cost of an office is $158,000, including wages, fringe benefits, rent, insurance, and power. If the office has 5 workstations, what is the average annual cost of each workstation?
$31,600
Sia drove her personal car 176 miles last year while helping a charity in a clothes drive. The IRS in that year allowed a deduction of $0.14 per mile for charitable use of a personal car. What was Sia's tax deduction?
$24.64
The 3 departments of Aranson's Auto Repair use this floor space: Body, 3,000 ft squared; Repair, 2,000 ft squared; and Painting, 1,000 ft squared. The annual insurance cost of the building is $2,800. It is distributed on the basis of the floor space of each department. How much should each department be charged annually for insurance? (three answers)
Body, $1,400 ; Repair, $933 ; Painting, $467
A business van costs $21,000. Using the MARCS table, find the depreciation for the first year. What is the book value at the end of the first year? (two answers)
$4,200 ; $16,800
Belcro in Madison ships 42,350 pounds of lumber by freight to True-Time Inc in Pine Valley, f.o.b. The freight company charges $21.19 a cwt. What is the freight charge? Who pays it? (Two answers)
$8,984.56 ; Belcro
A clerk can sort and File 1,125 invoices per day. If the clerk earns $10.20 per hour and works for 7.5 hrs a day, how much does it cost to file each invoice?
$0.068
Ron spend 2.5 days at a business seminar. He was reimbursed for traveling the 250 miles to and from the seminar by personal car at $0.515 a mile. He was also paid $135 per diem. What was his total reimbursement?
$466.25