Question

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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	$3,963
Direct labor	5,790
Indirect materials	584
Direct materials used	6,557
Sales commissions	2,630
Factory manager’s salary	2,951
Advertising	642

What are Leonard Company's conversion cost?

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Anderson Inc incurred $90,264 in direct labor costs (5,244 hours) and $16,486 in supervision costs (paid in cash).
Debit to Manufacturing Overhead would be $_____________

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Solo Manufacturing company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $163,800 and machine hours to be 13,600. Actual manufacturing overhead was $129,700 and actual machine hours was 13,570.

What is the debit to manufacturing overhead?

Answer 1

1. Job 101 Prime Cost includes only Direct Material and Direct Labour Cost.

So Prime Cost = $800.

2. Leonard Company

Conversion costs are the costs that are incurred by companies when converting raw materials into finished goods.

So Conversion Cost will be = $19845 [Factory Rent $3963 + Direct Labour $ 5790 + Indirect Materials $584 +  

Direct Material $ 6557 + Factory Manager's salary $ 2951]

3. Solo Manufacturing company

Debit to Manufacturing Overhead is $34100. (Overhead at the beginning $163800 - Actual overhead incurred $129700)