Direct material cost relates to the material which use in production and direct labor cost means the labor which helps in making raw material into finished goods and other remaining expenses are manufacturing overhead . To explain: Explain the change in relative proportion of material, labor, Manufacturing overhead.

Question

Want to see the full answer?

Answer 1

Question

Chapter 1, Problem 13E

To determine

Concept introduction:

Direct material cost relates to the material which use in production and direct labor cost means the labor which helps in making raw material into finished goods and other remaining expenses are manufacturing overhead.

To explain:

Explain the change in relative proportion of material, labor, Manufacturing overhead.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Life-Cycle Costing; Service Department In the chapter, we illustrated the use of the life-cycleconcept for both the cost and sales life cycles of a company’s product lines. It can also be usefulto extend the cost life cycle to the service department. In Chapter 7, we were interested in theallocation of service department costs to product lines. Here we are interested in managing the costsof a service department over its life cycle. The information technology department (IT) is a goodexample. The costs incurred in IT have the following phases:1. Acquire IT assets, including computers, hubs, cables, and other assets.2. Acquire software and deploy IT for the desired application and functionality.3. Maintain management and operations of the IT assets.4. Provide user support.5. Retire the assets on a planned schedule and replace as needed.Required How can life-cycle costing help in the management of the IT department?

Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Appr Sentence comp a. An example of factory overhead is (electricity used to run assembly line, CEO salary). b. Direct materials costs combined with direct labor costs are called (prime, conversion) costs. c. Long-term plans are called (strategic, operational) plans. d. Materials for use in production are called (supplies, materials inventory). e. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving). f. The plant manager's salary would be considered (direct, indirect) to the product. g. The salaries of salespeople are normally considered a (period, product) cost. Previous Next

Techno Instruments uses a manufacturing costing system with one direct-cost category (direct materials) and three indirect-cost categories: a. Setup, production-order, and materials-handling costs that vary with the number of batches b. Manufacturing-operations costs that vary with machine-hours c. Costs of engineering changes that vary with the number of engineering changes made In response to competitive pressures at the end of 2016, Techno Instruments used value-engineering techniques to reduce manufacturing costs. Actual information for 2016 and 2017 is as follows: 2016 2017 Setup, production-order, and materials-handling costs per batch $8,600 $7,800 Total manufacturing-operations cost per machine-hour $59 $53 Cost per engineering change $18,750 $14,000 The management of Techno Instruments wants to evaluate whether value engineering has succeeded in reducing the target manufacturing cost per unit of one…