Question

Randy Inc. produces and sells tablets. The company incurred the following costs for the May: Advertising cost for monthly television ads Attachable keyboard Insurance for delivery truck Factory supervisor's salary Marketing manager's salary Assembly worker wages Miscellaneous soldering material used to seal case Hourly wages for factory security guard CEO's salary Speakers $ 6,600 20,600 660 3,750 3,450 28,000 1,250 2,400 7,800 5,400 int ances Required: Determine each of the following: 1. Direct material 2. Direct labor 3. Manufacturing overhead 4. Total manufacturing cost 5. Total period cost 6. Total variable cost 7. Total fixed cost

Answer 1

1)

Direct material = Keyboard + Speakers + Miscellaneous soldering materials

= $20,600 + $5,400 + $1,250

= $27,250

2)

Direct labour = Assembly workers wages = $28,000

3)

Manufacturing Overhead = Factory supervisor salary + Hourly wages for factory security guard

= $3,750 + $2,400

= $6,150

4)

Total manufacturing cost = Direct material cost + Direct labour + Manufacturing Overhead

= $27,250 + $28,000 + $6,150

= $61,400

5)

Total Period Cost = Advertising cost + Insurance + marketing managers salary + CEO salary

= $6,600 + $660 + $3,750 + $7,800

= $18,810

6)

Total Variable Cost = Direct material + Direct labour + hourly wage of security guard

= $27,250 + $28,000 + 2,400

= $57,650

7)

Total Fixed cost = Advertising cost + Insurance + Factory supervisor salary + Marketing manager salary + CEO Salary

= $6,600 + $660 + $3,750 + $3,450 + $7,800

= $22,260