Question

Answer this question fully:

Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow:

Factory rent	$	3,200
Company advertising		1,000
Wages paid to assembly workers		30,000
Depreciation for salespersons’ vehicles		2,000
Screws		500
Utilities for factory		900
Assembly supervisor’s salary		3,500
Sandpaper		150
President’s salary		6,000
Plastic tubing		4,200
Paint		250
Sales commissions		1,200
Factory insurance		1,000
Depreciation on cutting machines		2,000
Wages paid to painters		7,500

Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy.

Determine the total cost for each of the following:

	a. Direct Materials b. Direct Labor c. Manufacturing Overhead d. Prime Cost e. Conversion Cost f. Total Product Cost g. Total Period Cost h. Total Variable Cost i. Total Fixed Cost

Answer 1

Answer:

a. Direct Materials = Plastic Tumbing = $4,200
b.Direct Labour = Wages paid to assemble workers + wages paid to painters = $30,000+$7,500 = $37,500
c.Manufacturing overhead =$11,500
Factory rent	3,200
Screws	500
Utilities for factory	900
Assembly supervisor’s salary	3,500
Sandpaper	150
Paint	250
Factory insurance	1,000
Depreciation on cutting machines	2,000
Total MOH	11,500
d. Prime cost = Direct material + Direct Labour = $4,200+$37,500 =$41,700
e. Conversion cost = Direct Labour + Manufacturing overhead = $37,500+$11,500 =$49,000
f. Total product cost = Direct material + Direct Labour+ Manufacturing overhead = $4,200+$37,500+$11,500 =$53,200
g. Total period cost = Company advertising+Depreciation for salesperson vehicle+Presidents salary+Sales commission
Total period cost = $1,000+2,000+6,000+1,200 = $10,200
h. Total variable cost = Wages paid to assembly workers+Srews+Utilities for factory+Sandpaper+ Plastic tubing+Paint+Sales commission+Wages paid to painters
Total variable cost = $30,000+500+900+150+4,200+250+1,200+7,500 = $44,700
i. Total fixed cost = Factory rent+Company advertising+Depreciation for salesperson vehicle+Assembly supervisor salary+Presidents salary+Factory insurance+Depreciation on cutting machines
Total fixed cost = $3,200+1,000+2,000+3,500+6,000+1,000+2,000 = $18,700
a. Direct Materials	4,200
b.Direct Labour	37,500
c.Manufacturing overhead	11,500
d. Prime cost	41,700
e. Conversion cost	49,000
f. Total product cost	53,200
g. Total period cost	10,200
h. Total variable cost	44,700
i. Total fixed cost	18,700