Question

The following costs were incurred by Greetings R Us, a firm manufacturing greetings cards for the last year: Service Department costs (All of the services are provided to manufacturing function) Fringe benefits to Direct laborers in manufacturing function Fringe benefits to Indirect laborers in manufacturing function Fringe benefits for production supervisors Total overtime premiums paid Cost of idle time: Production employees Administrative costs Rental of office space for sales personnel Sales commissions Product promotion costs Direct material Advertising expenses Depreciation on factory building Direct manufacturing labor: Wages Cost of finished goods at year end Indirect manufacturing labor: Wages Production Supervisors' salary $40,000 $42,500 $16,000 $5,400 $28,000 $12,000 $70,500 $8,000 $3,000 $4,500 $890,000 $57,000 $53,000 $250,200 $60,000 $72,000 $24,500 Required: Compute the following costs for the year just ended: (10 points) A) Total prime costs B) Total manufacturing overhead costs (C) Total conversion costs (D) Total product costs (E) Total period costs

Answer 1

Answer is as follows: (A) Total Prime Costs: 1. Direct material $890000 & Direct manufacturing labor $250200 wages 3. Fringe benefits to direct labour in mig function 4 Total overtime premum paid $28000 8. Cost of idle time; prodon employees $ 12000 $122 2700 $42500