Acct 525 managerial accounting (average product cost per bookcase)

ACCT 525 Managerial Accounting

Heritage Company manufactures a beautiful bookcase that enjoys widespread popularity. The company has a backlog of orders that is large enough to keep production going indefinitely at the plant’s full capacity of 4,200 bookcases per year. Annual cost data at full capacity follow



Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as either variable or fixed with respect to the number of units produced and sold; and second, as either a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)


Direct materials used (wood and glass)


$ 432,000  


  Administrative office salaries


$   108,000  


 Factory supervision


$ 70,000  


  Sales commissions


$  63,000  

 Depreciation, factory building


$ 108,000  


  Depreciation, administrative office equipment


$  2,000  

    Indirect materials, factory


$ 16,000  

   Factory labor (cutting and assembly)

 $  88,000  



$ 96,000  

   Insurance, factory

 $   7,000  

  Administrative office supplies (billing)

$  5,000  

Property taxes, factory

$ 22,000  

Utilities, factory

 $ 49,000  















           Cost Item                                          Variable               Fixed       (Selling or admin costs  )             direct            indirect


 Direct materials used (wood, glass)

  Administrative office salaries

   Factory supervision

   Sales commissions

   Depreciation, factory building

   Depreciation, admin. Office equipment

   Indirect materials, factory

   Factory labor (cutting and assembly)


   Insurance, factory

   Administrative office supplies (billing)

   Property taxes, factory

   Utilities, factory


Total costs




Compute the average product cost per bookcase. (Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)


Average product cost        $  per bookcase ?



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