Answer:
Results are below.
Explanation:
<u>1) Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.</u>
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Direct material= Thread + Premium quality cotton material + Buttons
Direct material= 1,000 + 42,000 + 750
Direct material= $43,750
<u>2) Direct labor is production or service labor that is assigned to a specific product, cost center, or work order. </u>
Direct labor= Wages paid to seamstresses + Wages paid to cutters Direct labor= 75,000 + 50,000
Direct labor= $125,000
<u>3) Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured</u><u>.</u>
Manufacturing overhead= Factory rent + Utilities for factory + Cutting room supervisor's salary + Factory insurance + Depreciation on sewing machines
Manufacturing overhead= 42,000 + 22,000 + 30,000 + 15,000 + 6,000
Manufacturing overhead= $115,000
4) Total manufacturing costs= 43,750 + 125,000 + 115,000
Total manufacturing costs= $283,750
5) Prime cost= direct material + direct labor
Prime cost= 43,750 + 125,000
Prime cost= $168,750
6) Conversion cost= direct labor + MOH
Conversion cost= 125,000 + 115,000
Conversion cost= $240,000
7) <u>Period costs are not directly tied to the production process</u>. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
Period costs= Company advertising + Depreciation on salespersons' vehicles + President's salary
Period costs= 18,000 + 25,000 + 75,000
Period costs= $118,000
