mert Ds A 15 In the method of least squares cach single meas

mert Ds A 15. In the method of least squares, cach single measure of closeness is first squared. Squaring the deviations avoids problems caused by a mix of positive and negative numbers Multiple Choice ldentify the choice that best completes the statement or answers the gteestion 16. If the total warehousing cost for the year amounts to $450,000, and 40 percent of the warehousing activity is associated with finished goods and 60 percent with direct materials, how much of the sost would be charged s a product cost a. $90,000 b. $180,000 c. S270,000 d. $450,000 17. All of Eva Enterprise\'s operations are housed in one building with the costs of accumulated in a separate account. The total costs incurred in July amounted to $48,000. The company allocates these costs on the basis of square feet of floor space occupied. Administrative offices, sales offices, and factory operations occupy 9,000,6,000, and 30,000 square feet, respectively. How much will be classified as a product cost for July? a. $9,600 b. $6,400 c. $16.000 d. $32,000 Figure 2-11 Information from the records of the Abel Corporation for July 2014 was as follows: Sales Selling and administrative expenses Direct materials used Direct labor Factory overhead* $1,230,000 210,000 264,000 300,000 405,000 *variable overhead is $205,000, fixed overhead is $200,000 Inventories July 1. 2014 July 31.2014 $42,000 Direct materials Work in process Finished goods 36,000 75,000 69,000 57,000 Refer to Figure 2-11. The prime costs are a. $210,000 b. $264,000 c. $300,000 d. $564,000 18.

Solution

16 option c. 270000 is correct Ref Particulars Amount a Total cost        4,50,000 b % used for direct materials 60% c= a*b Product cost        2,70,000 Finished goods related warehousing costs are period costs not product costs 17 option d. 32000 is correct Ref Particulars Amount a Total costs 48000 b Total sq ft 45000 c=a/b Cost per sq ft 1.06666667 d Occupy by factory 30000 e= c*d Product cost 32000 18 Option d. 564000 is correct Ref Particulars Amount Direct material 264000 Direct labor 300000 Prime costs 564000