Question

Compute the total manufacturing cost for a manufacturer with the following information fe Raw materials purchased Direct materials used Direct labor used Factory supervisor salary Salesperson commissions Depreciation expense-Factory building Depreciation expense-Delivery equipment Indirect materials $ 38,400 54,500 14,800 9,000 6,480 3,800 3,600 1,550 Total Manufacturing Cost is Computed as: Total manufacturing costs

Answer 1

Ans:  

A). Plan A= $99 per month

Plan B for 1750 minutes and 1700 texts

= $1,750*$0.20+$1700*$0.10

  = $ 350+170

= $ 520

B). if doubled to 3500 minutes and 3400 texts

Plan A= it will be remain same as it provides unlimited texts and calls

i.e. $99 per month.

Plan B= $3500*0.20+$3400*0.10

= $ 700+$ 340

=$1040

2. Total Manufacturing costs

Particulars	Amount($)
Direct material used	$54,500
Direct labor used	$ 14,800
Factory supervision salary =9000
Depreciation expense= factory building= 3800
indirect materials=1550
Total overhead costs	$14,350
Total Manufacturing costs	$83,650

3. Products costs= rent on factory building, indirect material , production manager salary

period costs= interest expense, sales commission. office manager salary, depreciation- equipment, factory maintenance