Question

Job 101 has a direct materials cost of $800 and a total manufacturing cost of $3,000. Overhead is applied to jobs at a rate of 150 percent of direct labor cost.

What is the prime cost?

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Leonard Company has the following costs in its manufacturing company

Factory rent	$3,673
Direct labor	6,295
Indirect materials	694
Direct materials used	6,723
Sales commissions	2,365
Factory manager’s salary	2,726
Advertising	867

What are Leonard Company's total manufacturing cost? 3673+6295+6723+2726 is wrong

Parker Company makes custom chef aprons. Parker has the following costs in its manufacturing company related to labor. Wages paid to seamstresses $12,873 Wages paid to sales team 15,473 Wages paid to cutters 11,766 Wages paid to the seamstress supervisor 16,721 Office manager’s salary 18,050 Sales Commissions 5,260 What are Parker Company's direct labor costs? 12873+11766+16721 is wrong

Answer 1

Let the direct labor costs be x
Calculate direct labor costs as shown below:
Total manufacturing costs	Direct material + Direct labor + Overhead applied
3000	800 + x + 1.5x
3000-800	2.5x
2200	2.5x
x	2200/2.5
x	$880
Prime costs	Direct materials + Direct labor costs
Prime costs	800+880
Prime costs	$1,680
Calculate Leonard company's total manufacturing costs as shown below:
Total manufacturing costs	Factory rent + Direct labor + Indirect material + Direct material used + Factory manager's salary
Total manufacturing costs	3673+6295+694+6723+2726
Total manufacturing costs	$20,111
Thus, Leonard company's total manufacturing costs is $20,111
Calculate direct labor costs for parker company
Direct labor costs	Wages to seamstresses + Wages to cutters
Direct labor costs	12873+11766
Direct labor costs	$24,639