General when the question has fewer numbers, I found easier to answer, but when different numbers from different departments are put on the question, it confuses me a lot, My question below is asking me to do variable cost, could you kindly explain in details when answering. Thanks you
The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory overhead is applied to the jobs based on direct labour hours—the absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The company's income statements and other data for the last two years are as follows:
In 2015 and 2016, the actual direct labour hours used were 20,700 and 23,700, respectively. Raw materials put into production were $292,000 in 2015 and $370,900 in 2016. The actual fixed overhead was $42,100 for 2015 and $21,260 for 2016, and the planned direct labour rate was the direct labour achieved.
For both years, all of the administrative costs were fixed. The variable portion of the selling expenses results from a 5% commission that is paid as a percentage of the sales revenue.
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