Miller Companys total sales are 186000 The companys direct l

Miller Company\'s total sales are $186,000. The company\'s direct labor cost is $22,320, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $27,900 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? 1. Total manufacturing overhead cost 2. Total direct materials cost 3. Total manufacturing cost 4. Total variable selling and administrative cost 5. Total variable cost 6. Total fixed cost 7. Total contribution margin

Solution

Prime cost   = Direct materials + Direct labor           x           = .60x   + 22,320 so x                = 22,320/.4 55800 so direct materials 55800*60%= 33480 Conversion cost = Direct labor + overhead x                             = 22320 + .70x x                             = 22320/.3 74400 overhead         = 74,400*70% = 52,080 Total Selling and administrative expense 27,900 less Variable selling & administrative expe 9300 Fixed selling & administrative expense 18,600 1) total manufacturing overhead cost 52,080 2) Total direct material cost 33,480 3) total manufacturing cost 107,880 4) total variable selling and adm cost 9,300 5) total variable cost 65,100 6) total fixed cost 70,680 7) Total contribution margin          120,900 notes Direct materials 33,480 direct labor 22,320 overhead 52,080 total manufacturing cost 107,880 Direct materials 33,480 direct labor 22,320 Variable selling & adm cost 9,300 Total variable cost 65,100 Fixed manufacturing overhead 52,080 Fixed selling & adm cost 18,600 total fixed cost 70,680 Sales 186,000 total variable cost -65,100 total contribution margin 120,900