Exercise $1-7($Algo$)$ Direct and Indirect Costs $[$LO$1-1]$

Required:

Assume the cost object is units of production:

a$.$ What is the total direct manufacturing cost incurred to make $20,250$ units?

b$.$ What is the total indirect manufacturing cost incurred to make $20,250$ units?

Assume the cost object is the Manufacturing Department and that its total output is $20,250$ units.

a$.$ How much total manufacturing cost is directly traceable to the Manufacturing Department?

b$.$ How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

Assume the cost object is the company's various sales representatives. Furthermore, assume that the company spent $$64,800$ of

its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the

company's sales representatives' compensation.

a$.$ When the company sells $20,250$ units, what is the total direct selling expense that can be readily traced to individual sales

representatives?

b$.$ When the company sells $20,250$ units, what is the total indirect selling expense that cannot be readily traced to individual sales

representatives?