Determining variable costs for indirect materials. At the Shelby Company, indirect materials are purely variable costs, varying
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Determining variable costs for indirect materials. At the Shelby Company, indirect materials are purely variable costs, varying in proportion to direct labor hours worked at the rate of $.80 per direct labor hour.
a. Compute the total indirect materials cost for each of the following four levels of activity:
(1) 16,212 direct labor hours (2) 18,714 direct labor hours (3) 20,000 direct labor hours (4) 28,714 direct labor hours
b. What is the effect of increases in direct labor hours on the total cost of indirect materials?
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Related Book For
Cost Accounting Principles And Applications
ISBN: 9780070081529
5th Edition
Authors: Horace R. Brock
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