Question

2 Direct material Advertising expense Depreciation on factory building Direct labor: wages Cost of finished goods inventory at year-en Indirect labor: wages Production supervisor's sala Service department costs Direct labor: fringe benefits Indirect labor: fringe benefits Fringe benefits for production supervisor Total overtime premiums paid Cost of idle time: production Administrative costs $2,300,800 97,060 116,000 515,000 115,000 2.5 points 42 47,800 100,a00 95,900 31,000 9,000 55,000 40,000 50,000 15,000 5,000 10,000 ees Rental of office space for sales personnel Sales commissions Product promotion cos Al I services are provided to manufacturing department SCost of idle time isa tThe rental of sales space was material not direct-labor wages given above s made necessary when the sales ofices were converted to storage space for fa Required 1. Compute each of the following costs for the year just enc 8 Answer is not complet a Total prime costs otal manufacturing overhe costs c Total conversion cost d. Total product costs e Total period costs 300,000 Nex

Answer 1

a.	Total prime costs	$       2,910,000
b.	Total manufacturing overhead costs	$          540,000
c.	Total conversion costs	$       1,150,000
d.	Total product costs	$       3,450,000
e.	Total period costs	$          277,000

Working:

	DM	DL	MOH	Period cost
Direct material	2300000
Advertising expense				97000
Depreciation on factory building			116000
Direct labor: wages		515000
Indirect labor: wages			142000
Production supervisor's salary			47000
Service department costs			100000
Direct labor: fringe benefits		95000
Indirect labor: fringe benefits			31000
Fringe benefits for production supervisor			9000
Total overtime premiums paid			55000
Cost of idle time: production employees			40000
Administrative costs				150000
Rental of office space for sales personnel				15000
Sales commissions				5000
Product promotion costs				10000
Total costs $	2300000	610000	540000	277000

Prime cost = DM + DL = 2300000 + 610000 = $2910000

Conversion cost = DL + MOH = 610000 + 540000 = $1150000

Product cost = DM + DL + MOH = 2300000 + 610000 + 540000 = $3450000