Question

Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month. $ 938 Depreciation on factory equipment Depreciation on CEO's company car Speakers used in the keyboard Production supervisor's salary Glue and screws used in the keyboards Wages of persons who install the speakers Cost to run an ad on local radio stations Utilities for the factory Personnel manager's salary Wages of person who attaches legs to keyboards 1.269 2.370 260 2,830 680 1,320 2.650 2.640 Required: 1. Calculate the total product cost for Noteworthy. 2. Calculate the prime cost for Noteworthy. 3. Calculate the manufacturing overhead for Noteworthy. 4. Calculate the direct labor for Noteworthy. 5. Calculate the conversion cost for Noteworthy 6. Calculate the total variable cost with number of units produced as the activity) for Noteworthy 7. Calculate the total fixed cost (with number of units produced as the activity for Noteworthy

Answer 1

1. Calculate the total product cost for Noteworthy. Total Product Cost $10,950 2. Calculate the prime cost for Noteworthy. Prime Cost $6,070 3. Calculate the manufacturing overhead for Noteworthy. Manufacturing Overhead $4,880 4. Calculate the direct labor for Noteworthy. Direct Labor Cost $4,870 5. Calculate the conversion cost for Noteworthy. Conversion Cost $9,750 6. Calculate the total variable cost (with number of units produced as the activity) for Noteworthy. Total Variable Cost $7,650 7. Calculate the total fixed cost (with number of units produced as the activity) for Noteworthy. Total Fixed Cost $6,830

$930 1,200 2,370 Explanation: 1. Calculate the total product cost for Noteworthy. Depreciation on factory equipment Speakers used in the keyboard Production supervisor's salary Glue and screws used in the keyboards Wages of persons who install the speakers Utilities for the factory Wages of person who attaches legs to keyboards Total Product Cost 260 2,830 1,320 2,040 $10,950 2. Calculate the prime cost for Noteworthy. Prime costs = Direct materials + Direct labor Speakers used in the keyboard Wages of persons who install the speakers Wages of person who attaches legs to keyboards Prime Cost $1,200 2.830 2,040 $6,070

$930 2,370 3. Calculate the manufacturing overhead for Noteworthy. Depreciation on factory equipment Production supervisor's salary Glue and screws used in the keyboards Utilities for the factory Manufacturing Overhead 260 1,320 $4,880 $2,830 4. Calculate the direct labor for Noteworthy. Wages of persons who install the speakers Wages of person who attaches legs to keyboards Direct Labor Cost 2,040 $4,870 15. Calculate the conversion cost for Noteworthy. Conversion costs - Direct labor + Factory overhead $930 2,370 260 Depreciation on factory equipment Production supervisor's salary Glue and screws used in the keyboards Utilities for the factory Wages of persons who install the speakers Wages of person who attaches legs to keyboards Conversion Cost 1,320 2.830) 2,040 $9,750

6. Calculate the total variable cost (with number of units produced as the activity) for Noteworthy. Speakers used in the keyboard Glue and screws used in the keyboards Wages of persons who install the speakers Utilities for the factory Wages of person who attaches legs to keyboards Total Variable Cost $1,200 260 2,830 1,320 2,040 $7,650 $930 7. Calculate the total fixed cost (with number of units produced as the activity) for Noteworthy. Depreciation on factory equipment Depreciation on CEO's company car 200 Production supervisor's salary 2,370 Cost to run an ad on local radio stations 680 Personnel manager's salary 2,650 Total Fixed Cost $6,830