Question

E1-13 (Algo) Classifying and Calculating Cost [LO 1-4) Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month. Depreciation on factory equipment $ 850 Depreciation on CEO's company car Speakers used in the keyboard 1,300 Production supervisor's salary 2, 360 Glue and screws used in the keyboards Wages of persons who install the speakers 2,820 Cost to run an ad on local radio stations 670 Utilities for the factory 1,250 Personnel manager's salary 2,520 Wages of person who attaches legs to keyboards 1,990 Required: 1. Calculate the total product cost for Noteworthy. 2. Calculate the prime cost for Noteworthy. 3. Calculate the manufacturing overhead for Noteworthy. 4. Calculate the direct labor for Noteworthy. 5. Calculate the conversion cost for Noteworthy. 6. Calculate the total variable cost (with number of units produced as the activity) for Noteworthy. 7. Calculate the total fixed cost (with number of units produced as the activity) for Noteworthy. 1. Total Product Cost 2. Prime Cost 3. Manufacturing Overhead 4. Direct Labor Cost 5. Conversion Cost 6. Total Variable Cost 7. Total Fixed Cost

Answer 1

PARTICULRS DETAILS AMOUNT DIRECT MATERIAL COST SPEAKER USED 1300 GLUES AND SCREW 260 (A) TOTAL DIRECT MATERIAL COST 15601 ADD :DIRECT LABOUR COST wages of the persons installed speaker 2820 wages of the persons who will instal keyboards 1990 (B) TOTAL DIRECT LABOUR COST 4810 ANSWER Q4 ADD: DIRECT EXPNESES 6370 ANSWER Q2 850|| 1250 2360 4460 ANSWER Q3 10830 (C) PRIME COST (A+B+C) ADD:FACTORY OVERHEAD DEP FACTORY EQUIPMENT UTILITIES FOR THE FACTORY PRODCTION SUPERVISOR SALARY | (D) TOTAL FACTORY OVERHEAD FACTORY COST (A+B+C+D) ADD:OFFICE & ADMINITRATION OVERHEAD DEP CEO COMPANY CAR COST TO RUN LOCAL RADIO STATIONS PERSONEL MANAGER SALARY (E) TOTAL OFFICE & ADMINISTRATION OERHEAD PRODUCT COST OR COST OF PRODUCTION (A+B+C+D+E) 120 670 2520 3310 14140 ANSWER Q1

ANSWER Q5 CONVERSION COST:= FACTORY OVERHEAD-DIRECT MATERIAL COST 10830-1560 9270 ANSWER Q6 TOTAL VARIABLE COST UNDER THIS QUESTIONS DIRECT MATRIAL COST+DIRECT LABOUR COST 1560+4810 6370 VARIABLE COST ARE THOSE COST WHICH ARE PER UNIT CONSTANT AND CHANGES IN TOTAL ANSWER Q7 TOTAL VARIABLE COST UNDER THIS QUESTIONS FACTORY OVERHEAD+OFFICE & ADMIN OVERHEAD 4460+3310 7770 FIXED COST ARE THOSE COST WHICH FIXED IN TOTAL PER UNIT CHANGES