Answer:
Explanation:
Giving the following information:
Service department costs= $ 100,000: Period
Direct labor: wages 485,000: Product - DL
Direct labor: fringe benefits 96,000: Product - DL
Indirect labor: fringe benefits 31,000: Product - MOH
Fringe benefits for production supervisor 10,000: Product - MOH
Total overtime premiums paid 55,000: Product - DL
Cost of idle time: production employees 40,000: Product - DL
Administrative costs 150,000: Period
Rental of office space for sales personnel 15,000: Period
Sales commissions 6,000: Period
Product promotion costs 10,000: Period
Direct material used 2,100,000: Product - DM
Advertising expense 97,000: Period
Depreciation on factory building 116,000: Product - MOH
Cost of finished-goods inventory at year-end 115,000
Indirect labor: wages 141,000: Product - MOH
Production supervisor’s salary $ 46,000: Product - MOH
First, we will classify each cost as product/ period, and Direct Material (DM), Direct Labor (DL) and manufacturing overhead (MOH).
A) Prime costs= direct material + direct labor
Prime costs= 2,100,000 + (485,000 + 96,000 + 55,000 + 40,000)
Prime costs= 2,100,00 + 676000= 2,776,000
B) Manufacturing overhead= 31000 + 10000 + 116000 + 141000 + 46000= $344,000
C) conversion cost= direct labor + manufacturing overhead
CC= 676000 + 344000= 1,020,000
D) Product costs= DM + DL + MOH= 2100000+676000+344000= $3,120,000
E) Period cost= 100000 + 150000 + 15000 + 6000 + 10000 + 97000= $378,000
