Question

Wachowski Company reported the following cost data for the year 2017. Factory maintenance costs $90,000 Direct labor, wages 353,000 Direct labor, health insurance 33,000 Indirect labor, health insurance 16,000 Health insurance for production supervisor Administrative costs Rental of office space for administrative staff Sales commissions Direct material 6,500 54,000 18,500 53,000 1,240,000 632,000 39,000 62,000 70,000 32,000 Indirect materials Advertising expense Depreciation on factory building Indirect labor, wages Production supervisor's salary Use the above cost data to complete the table below. Total prime costs $ 1,626,000 2,135,000 Total manufacturing overhead costs $ Total product costs Total period costs Feedback Check My Work Prime costs include direct items related to creating the product. This includes any materie related to the overall manufacturing process. Product costs include all types of costs asso costs Check My Work

Answer 1

Ans. 1	Particulars	Amount
	Direct material	$1,240,000
	Direct labor, wages	$353,000
	Direct labor, health insurance	$33,000
	Total prime cost	$1,626,000
	*Prime cost is equal to the sum of direct materials and direct labor costs.
Ans. 2	Particulars	Amount
	Factory maintenance costs	$90,000
	Indirect labor, health insurance	$16,000
	Health insurance for production supervisor	$6,500
	Indirect materials	$632,000
	Depreciation on factory building	$62,000
	Indirect labor, wages	$70,000
	Production supervisor's salary	$32,000
	Total manufacturing overhead costs	$908,500
	*Only indirect manufacturing costs are known as manufacturing overhead costs.
Ans. 3	Particulars	Amount
	Total prime cost	$1,626,000
	Total manufacturing overhead costs	$908,500
	Total product cost	$2,534,500
	*Total product cost is the sum of all manufacturing costs whether they are
	direct or indirect.
Ans. 4	Particulars	Amount
	Administrative costs	$54,000
	Rental of office space for administrative staff	$18,500
	Sales commissions	$53,000
	Advertising expense	$39,000
	Total period costs	$164,500
	*Total period cost is the sum of all selling, general, office and administrative costs.