Incurrence of direct labor costs

Assignment Help Cost Accounting

Reference no: EM139589

Q1. In the standard cost formula Y = a + bX, what does the "b" represent?

1. total cost

2. total fixed cost

3. total variable cost

4. variable cost per unit

Q2. Milnes Corporation has provided the following data concerning its direct labor costs for November:

Standard wage rate	$13.40 per DLH
Standard hours	5.0 DLHs per unit
Actual wage rate	$14.00 per DLH
Actual hours	20,120 DLHs
Actual output	4,200 units

The journal entry to record the incurrence of direct labor costs in November would include the following for Work in Process:

1. Debit of $281,400

2. Credit of $281,680

3. Credit of $281,400

4. Debit of $281,680

Q3. A company produces a single product. The following volume and average cost data for two accounting periods have been provided by management:

Number of units	500	$800
Direct materials	$2.00	$2.00
Direct labor	$1.50	$1.50
Manufacturing overhead	$2.50	$1.75
Other overhead	$1.00	$0.625

The best estimate for the cost formula for the total cost of producing and selling the product (where X is the number of units produced and sold in a period) is:

1. $1,000 + $1.125 X

2. $1,000 + $3.50 X

3. $1,500 + $3.50 X

4. $1,500 + $4.00 X

Reference no: EM139589

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