Question

E1-13 (Static) 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. $ 800 100 Depreciation on factory equipment Depreciation on CEO's company car Speakers used in the keyboard Production supervisor's salary Glue and screws used in the keyboards Wages of persons who install the speakers Cost to run an ad on local radio stations Utilities for the factory Personnel manager's salary Wages of person who attaches legs to keyboards 1,100 2,800 370 3,000 600 1,200 2,500 1,950 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 Prime cost Manufacturing overhead Direct labor cost Conversion cost Total variable cost Total fixed cost $ $ $ $ $ $ $ 11,220 6,050 10,120 X 5,170 4,950 7,620 6,800 5. 6. 7.

Answer 1

3.

Manufacturing Overhead = Depreciation on factory equipment + Production supervisor's salary+ Glue and screws used in the keyboards + Utilities for the factory

= 800+2,800+370+1,200

= $5,170

4.

Direct labor cost = Wages of person who install the speakers + Wages of person who attaches legs to keyboards

= 3,000+1,950

= $4,950

5.

Conversion cost =Direct labor cost + Manufacturing Overhead

= 4,950+5,170

= $10,120

3.	Manufacturing overhead	$5,170
4.	Direct labor cost	$4,950
5.	Conversion cost	$10,120

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