Miller Companys total sales are 144000 The companys direct l

Miller Company\'s total sales are $144,000. The company\'s direct labor cost is $17,280, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $21,600 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? Total manufacturing overhead cost Total direct materials cost Total manufacturing cost |Total variable selling and administrative cost Total variable cost Total fixed cost 7. Total contribution margin

Solution

Req 1. Direct labour cost: $ 17280 (which is 30% of conversion cost) Conversion cost: (17280 /30*100) 57600 Less: Direct labour cost: 17280 Total Manufacturing overheads 40320 Req 2: Direct labour cost: $17280 (which is 40% of Prime cost) Prime cost (17280/40*100) 43200 Less: Direct labour cost 17280 Direct Material cost 25920 Req 3: Total manufacturing cost: Direct Material 25920 Direct labour 17280 Manufacturing overheads 40320 Total manufacturing cost: 83520 Req 4: Sales: 144000 Variable Selling and Admin expense % of sales 5% Total variable Selling and Admin Expense 7200 ($144,000 *5%) Req 5: Total Variable cost: Direct material 25920 Direct Labour 17280 Variable Selling and admin OH 7200 Total Variable cost: 50400 Req 6: Total Fixed cost: Manufacturing OH 40320 Selling and Admin OH (21600-7200) 14400 Total Fixed cost: 54720 Req 7: Total Contribution margin: Sales revenue 144000 Less: Total variable cost 50400 Contribution Margin 93600 Amount In $ 1.Total manufacturing OH 40320 2. Total Direct material cost 25920 3. Total Manufacturing cost 83520 4. Total Variable Selling and Admin OH 7200 5. Total Vvariable cost 50400 6. Total Fixed cost 54720 7. Contribution margin 93600