Pretty Pillows, Mfg., manufactures silk throw pillows. Last month the company pr

Question

Pretty Pillows, Mfg., manufactures silk throw pillows. Last month the company produced 3,890 pillows. Using job order costing, determine the product unit cost for one pillow based on the following costs: production facility utilities, $1,600; depreciation on production equipment, $650; indirect materials, $400; direct materials, $5,300; indirect labor, $1,000; direct labor, $3,500; sales commissions, $4,000; president's salary, $8,000; insurance on production facility, $1,000; advertising expense, $900; rent on production facility, $6,000; rent on sales office, $4,000; and legal expense, $600. Round your answer to two decimal places.

Explanation / Answer

Period costs= admin & selling and things not related to production
Product costs= direct labor, direct materials, and MNFG overhead

utilities = overhead
depreciation on production equip = overhead
indirect material = overhead
direct materials = direct materials (product cost)
indirect labor = overhead
direct labor = direct labor (product cost)
sales commissions = admin & selling expense
president salary = admin & selling expense
Insurance on production facility = overhead
advertising expense = admin & selling
rent on facility= overhead
rent on sales office= admin & selling
legal expense = admin & selling

now you know where to put the money.

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