Question

OBJECTIVE2 Exercise 2-31 Cost Classification Loring Company incurred the following costs last year: Sua Direct materials Factory rent Direct labor Factory utilities Supervision in the factory Indirect labor in the factory Depreciation on factory equipment Sales commissions Sales salaries Advertising Depreciation on the headquarters building Salary of the corporate receptionist Other administrative costs Salary of the factory receptionist S216,000 24,000 120,000 6,300 50,000 30,000 9,000 27,000 65,000 37,000 10,000 30,000 175,000 28,000 (Continued)

Answer 1

Exercise 2-31:	Product Cost			Period Cost
	Direct Materials	Direct Labor	Manufacturing Overhead	Selling Expense	Administrative Expense
Direct materials	216000
Factory rent			24000
Direct labor		120000
Factory utilities			6300
Supervision in factory			50000
Indirect labor in the factory			30000
Depreciation on factory equipment			9000
Sales commissions				27000
Sales salaries				65000
Advertising				37000
Depreciation on headquarters building					10000
Salary of the corporate receptionist					30000
Other administrative costs					175000
Salary of factory receptionist			28000
Total	216000	120000	147300	129000	215000
Total product cost for last year = 216000+120000+147300 =	$            4,83,300
Total period cost = 129000+215000 =	$            3,44,000
Unit product cost = 483300/30000 =	$                  16.11
Exercise 2-36:
Number of jet skis sold = 6800+94000-7200 =	93600	Units
Cost of goods sold = 93600*$2200 =	$    20,59,20,000
Exercise 2-37:
Cost of direct materials used = 14000+25000-6500 =	$                32,500
Total manufacturing cost = 32500+10000+42000 =	$                84,500
Cost of goods manufactured = 8000+84500-4000 =	$                88,500
Exercise 2-38:
Cost of goods sold = 9000+88500-7000 =	$                90,500
Note:
REQUIREMENT NOT GIVEN FOR JASPER COMPANY.