Question

Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie's product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow: $ 3,110 1,100 31,900 2,130 525 825 Factory rent Company advertising Wages paid to assembly workers Depreciation for salespersons' vehicles Screws Utilities for factory Assembly supervisor's salary Sandpaper President's salary Plastic tubing Paint Sales commissions Factory insurance Depreciation on cutting machines Wages paid to painters 3,670 185 5,170 4,050 205 1,210 1,010 2,180 7,600 Assume that Suzie Whitson has decided to begin production of her outdoor children's toy. Required: 1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as variable or fixed cost. 3. Determine the total cost for each of the following:

Answer 1

Factory rent				product	MOH
Company advertising				period	NA
Wages paid to assembly workers				product	DL
Depreciation for salespersons vechicles				period	NA
Screws				product	MOH
Utilities for factory				product	MOH
Assembly supervisors salary				product	MOH
Sandpaper				product	MOH
President's salary				period	NA
Plastic tubing				product	DM
Paint				product	MOH
Sales commission				period	NA
Factory insurance				product	MOH
Depreciation on cutting machines				product	MOH
Wages paid to painters				product	DL
a)	Direct Materials
	Plastic tubing				4,050
	Direct Materials				4,050	answer
b)	Direct labor
	Wages paid to assembly workers				31,900
	Wages paid to painters				7,600
	Direct labor				39,500
c)	Manufacturing overhead
	Factory rent				3,110
	Screws				525
	Utilities for factory				825
	Assembly supervisors salary				3,670
	Sandpaper				185
	Paint				205
	Factory insurance				1,010
	Depreciation on cutting machines				2,180
	Manufacturing overhead				11,710	answer
d)	Prime cost				43,550
e)	Conversion cost				51,210
f)	Total product cost				55,260
g)	Total period cost
	Company advertising				1,100
	Depreciation for salespersons vechicles				2,130
	President's salary				5,170
	Sales commission				1,210
	Total period cost				9,610
h)	total variable cost
	Company advertising				1,100
	Wages paid to assembly workers				31,900
	Screws				525
	Utilities for factory				825
	Sandpaper				185
	Plastic tubing				4,050
	Paint				205
	Sales commission				1,210
	Wages paid to painters				7,600
	total variable cost				47,600	Answer
i)	total fixed cost
	Factory rent				3,110
	Depreciation for salespersons vechicles				2,130
	Assembly supervisors salary				3,670
	President's salary				5,170
	Factory insurance				1,010
	Depreciation on cutting machines				2,180
	total fixed cost				17,270	Answer