235. Award: 1.00 point  

Mountainburg Industries has developed two new products but has only enough plant capacity to introduce one product during the current year. The following
data will assist management in deciding which product should be selected.
Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not
allocated to individual products.
  
  Product L   Product W
Direct materials $ 44    $ 36 
Machining labor ($12/hour)   18      15 
Assembly labor ($10/hour)   30      10 
Variable overhead ($8/hour)   36      18 
Fixed overhead (4/hour)   18      9 
Total Manufacturing Cost $ 146    $ 88 
Estimated selling price per unit $ 170    $ 100 
Actual research and development costs $ 240,000    $ 175,000 
Estimated advertising costs $ 500,000    $ 350,000 

The advertising costs for the product selected by Mountainburg will be

 Prime costs.

 Conversion costs.

 Period costs.

m
er as
 Opportunity costs.

co
eH w
Advertising is a selling costs and considered a period cost since it's influence cannot be tied to changes in volume.

o.
References
rs e
ou urc
Multiple Choice Difficulty: 1 Easy Learning Objective: 02-02 Explain how costs are presented in
financial statements.

 
 236. Award: 1.00 point  
o
aC s
vi y re

Under full absorption costing, which of the following are included in product costs?

 Only direct materials and direct labor.

 Only variable manufacturing costs.

ed d

 Only conversion costs.

ar stu

 All fixed and variable manufacturing costs.

Full absorption includes all fixed and variable manufacturing costs.

is

References
Th

Multiple Choice Difficulty: 1 Easy Learning Objective: 02-06 Identify the components of a product’s
costs.
sh

https://www.coursehero.com/file/29416032/ACCT3032Sol46pdf/
  
 237. Award: 1.00 point  

Ramos Company has the following unit costs:

  
       
Variable manufacturing overhead $ 13 
Direct materials   12 
Direct labor   17 
Fixed manufacturing overhead   10 
Fixed marketing and administrative   8 

What cost per unit would be used for product costing under full absorption costing?

 $29

 $42

 $52

 $60

$13 + $12 + $17 + $10 = $52

m
References

er as
Multiple Choice Difficulty: 2 Medium Learning Objective: 02-06 Identify the components of a product’s

co
costs.

eH w
 

o.
 238. Award: 1.00 point   rs e
ou urc
Ramos Company has the following unit costs:
 
o

       
Variable manufacturing overhead $ 13 
aC s

Direct materials   12 

Direct labor   17 
vi y re

Fixed manufacturing overhead   10 

Fixed marketing and administrative   8 

What cost per unit would be used for product costing under variable costing?
ed d

 $29
ar stu

 $42

 $52

 $60
is

$13 + $12 + $17 = $42

Th

References

Multiple Choice Difficulty: 2 Medium Learning Objective: 02-06 Identify the components of a product’s
costs.
sh

https://www.coursehero.com/file/29416032/ACCT3032Sol46pdf/

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