Question

The following information is available for Wonderway, Inc., for 2015: Factory rent $ 28,300 Company advertising 20,200 Wages paid to laborers 85,000 Depreciation for president's vehicle 8,100 Indirect production labor 1,950 Utilities for factory 31,200 Production supervisor's salary 31,600 President's salary 60,200 Direct materials used 34,900 Sales commissions 7,630 Factory insurance 12,700 Depreciation on factory equipment 27,000 Required: 1. Calculate the direct labor cost for Wonderway. 2. Calculate the manufacturing overhead cost for Wonderway. 3. Calculate the prime cost for Wonderway. 4. Calculate the conversion cost for Wonderway. 5. Calculate the total manufacturing cost for Wonderway. 6. Calculate the period expenses for Wonderway.

Answer 1

Answer:

1. $85,000

2. $132,750

3. $119,900

4. $217,750

5. $252,650

6. $96,130

Explanation:

1. The computation of direct labor cost is shown below:

= Wages paid to laborers

= $85,000

2. The computation of manufacturing overhead cost is shown below:

= Factory rent + Indirect production labor + Utilities for factory + Production supervisor's salary + Factory insurance + Depreciation on factory equipment

= $28,300 + $1,950 + $31,200 + $31,600 + $12,700 + $27,000

= $132,750

3. The computation of prime cost is shown below:

=  Wages paid to laborers + Direct materials used  

= $85,000 + $34,900

= $119,900

4. The computation of conversion cost is shown below:

=  Wages paid to laborers + manufacturing overhead cost

= $85,000 + $132,750

= $217,750

5.  The computation of total manufacturing cost is shown below:

= Prime cost + manufacturing overhead cost

= $119,900 + $132,750

= $252,650

6.  The computation of period expenses is shown below:

= Company advertising +  Depreciation for president's vehicle + President's salary + Sales commissions

= $20,200 + $8,100 + $60,200 + $7,630

= $96,130