Reference no: EM132551122
A local merchandiser purchases inventory that it subsequently sells to customers. During the month of May, the following costs (in dollars) were incurred:
Cost of inventory purchased and sold: $20, 000
Selling Expenses: $4000
Administrative Expensive: $5000
Question 1: What was the product cost per unit if 1,000 units of inventory were purchased and sold during May?
a. $29
b. $26
c. $24
d. $25
Question 2: During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory.
Direct Materials - $20,000
Direct Labor - $40,000
Manufacturing Overhead - $25,000
What are the manufactures total product costs for the month?
a. $85,000
b. $65,000
c. $60,000
d. $45,000
Question 3: Which overhead cost is associated with unit level activity?
a. Power to run the equipment
b. Product design costs
c. Machine setup expenses
d. Property taxes
Question 4: What would be the appropriate cost drive to allocate overhead for a company that is labor intensive?
a. Number of labor hours
b. Totals sales dollars
c. Number of units produced
d. Total material cost