Exercise A: Product Costs, Period Costs, Prime Costs and Conversion Costs The following costs were taken...

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Exercise A: Product Costs, Period Costs, Prime Costs and Conversion Costs The following costs were taken from the Kellys Com

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Answer 1

Answer #1

overhead costs of manufacturing :

indirect material + indirect labour + other factory overheads ( utilities , insurance , depreciation )

10000 + 35000 + 14000 + 15000 + 20000

= $94000

Product costs :

Direct material + Direct labour + Overhead cost of manufacturing

145000 + 100000 + 94000

= $339000

period costs :

marketing and selling expenses + administrative expenses + interest expenses

40000+35000

= $75000

Prime costs :

Raw material cost (direct material ) + direct labour costs

145000+100000

= $245000

Conversion costs :

Direct labour + overhead costs of manufacturing

100000 + 94000

= $194000

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Answer 2

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