Question

artwell Inc. makes picture frames which are sold in a local retail store and through various websites.

Wood for frames $ 16,500

Rent for retail store 4,300

Depreciation on office equipment 660

Assembly worker wages 2,650

CEO's salary 4,150

Glue and nails 850

Online sales commissions 2,100

Glass for frames 6,600

Depreciation on factory equipment 1,250

Factory utilities 700

Stain for frames 750

1. Determine the cost of direct material.

2. Determine the cost of direct labor.

3. Determine the cost of manufacturing overhead.

4. Determine the total manufacturing cost.

5. Determine the total period cost.

6. Determine the total variable cost.

7. Determine the total fixed cost.

8. Determine the total prime cost.

9. Determine the total conversion cost.

Answer 1

	artwell Inc.
	Cost sheet
		$
1	Direct Materials;
	Wood for frames	16,500
	Glue and nails	850
	Glass for frames	6,600
	Stain for frames	750
	Total Direct Material costs		24,700
2	Direct Labor;
	Assembly worker wages	2,650
	Direct Labor Cost		2,650
3	Manufacturing overhead;
	Depreciation on factory equipment	1,250
	Factory utilities	700
	Total Manufacturing Overhead		1,950
4	Total Manufacturing costs ( 1+ 2+ 3)		29,300
5	Period costs;
	Rent for retail store	4,300
	Depreciation on office equipment	660
	CEO's salary	4,150
	Depreciation on factory equipment	1,250
	Total Period costs		10,360
6	Variable costs;
	Total Direct Material costs	24,700
	Direct Labor Cost	2,650
	variable overheads;
	Online sales commissions	2,100
	Factory utilities	700
	Total variable costs		30,150
7	Fixed costs;
	Rent for retail store	4,300
	Depreciation on office equipment	660
	CEO's salary	4,150
	Depreciation on factory equipment	1,250
	Total fixed costs		10,360
8	Prime costs;
	Total Direct Material costs	24,700
	Direct Labor Cost	2,650
	Total prime costs		27,350
9	Conversion costs;
	Manufacturing overhead costs	1,950
	Rent for retail store	4,300
	Depreciation on office equipment	660
	CEO's salary	4,150
	Total conversion costs		11,060