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Management accounting: Morgan Co, Sweet Shoppe Creamery

At the end of 2011, Morgan Company had two jobs still in process with a total balance of $2,500. According to the respective job cost sheets the jobs had $600 and $650 in direct materials costs and $200 and $50 in direct labor costs. What overhead rate is Morgan using?

A. 25% of direct labor costs.
B. 50% of direct material costs.
C. 10% of direct labor costs.
D. 80% of direct material costs.

Sweet Shoppe Creamery incurred the following costs: $800 of ice cream, 60 hours of direct labor at $9 per hour, $80 for indirect materials, $40 for indirect labor, $200 for product advertising, and $150 of administrative costs. How much are total product costs?

A. $1,340
B. $1,810
C. $1,660
D. $1,460

For make-or-buy decisions, which items are always relevant?

A. Incremental costs and incremental revenues.
B. Differential costs and opportunity costs.
C. Differential costs and sunk costs.
D. Differential costs and incremental revenues


Solution Summary

The solution answers Management accounting questions: Morgan Co, Sweet Shoppe Creamery, make-buy decisions.