2. Definitions of manufacturing concepts Interstate Manufacturing produces brass

Question

2. Definitions of manufacturing concepts Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended: Materials and supplies used Brass $75,000 Repair parts 16,000 Machine lubricants 9,000 Wages and salaries Machine operators 128,000 Production supervisors 64,000 Maintenance personnel 41,000 Other factory overhead Variable 35,000 Fixed 46,000 Sales commissions 20,000 Compute: a. Total direct materials consumed b. Total direct labor c. Total prime cost d. Total conversion cost

Explanation / Answer

a) direct materials consumed = 75000+16000+9000 = $100,000 b) direct labour = $128000 c) prime cost = $ 228000 d) conversion cost = $268000

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