Question

15 000 12 000 5000 1 500 700 2000 Timber Screws Steel Tubing Depreciation of vehicle Varnish Grease Office rent Cleaning oil Factory cleaner wages Machine operator * Factory security guard Carpenters Factory rent Factory supervisor Administrative expenses Assembly-line worker 500 4000 12 400 2 000 10 250 5 000 20 000 15 000 8 600 Unit 1 - Review Questions REQUIRED; calculate the following: 1. Direct material cost 2. Indirect material cost 3. Direct labour cost 4. Indirect labour cost Manufacturing overheads cost 6. Prime cost 7. Conversion cost 8. Total manufacturing costs 9. Period cost

Answer 1

Solution:

Direct material cost Timber 15000 Steel Tubing 12000 $ 27,000 Prime cost Direct material cost Direct labor cost 27000 31250 $ 58,250 Conversion cost Direct labor cost Indirect labor cost Indirect material cost Screws 1600 Varnish 1500 Grease 700 Cleaning Oil 500 $ 4,300 31250 26000 57,250 $ Total manufacturing costs Prime cost 58250 Manufacturing overheads cos 40300 $ 98,550 Direct labor cost Machine Operator 12400 Carpenters 10250 Assembly-line worker 8600 $ 31,250 Indirect labor cost Factory cleaner wages 4000 Factory security gurard 2000 Factory supervisor 20000 $ 26,000 Manufacturing overheads cost Indirect material cost 4300 Indirect labor cost 26000 Depreciation of vehicle 5000 Factory rent 5000 $ 40,300

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