Question

Part B (10 marks) Direct labour Oscar Production reports the following costs and expenses in May 2017: S10 200 10 000 Factory electricity cost Factory manager's salary Sales salaries 572 105 51700 1500 Repairs to office equipment 52 600 Indirect factory labour Factory repairs 2 100 16 000 Indirect materials Direct materials used 101 200 143 400 11 240 Advertising cost Office supplies used 4 000 Depreciation on factory equipment Required: Calculate the following costs. Provide a formula and show your workings for each of the calculations 1) Prime costs (2 marks) 2) Manufacturing overhead (3 marks)

Answer 1

1	Prime costs
	Direct materials used	$1,43,400
	Direct labour	$72,100
	Total	$2,15,500
2	Manufacturing overhead
	Factory electricity cost	$10,200
	Factory manager’s salary	$10,000
	Indirect factory labor	$52,600
	Indirect materials	$1,01,200
	Depreciation on factory equipment	$11,240
	Factory repairs	$2,100
	Total	$1,87,340
3	Conversions costs
	Direct labor	$72,100
	Manufacturing overhead	$1,87,340
	Total	$2,59,440
4	Period costs
	Sales salaries	$51,700
	Repairs to office equipment	$1,500
	Advertising cost	$16,000
	Office supplies used	$4,000
	Total	$73,200