The following cost data for the year just ended pertain to Sentiments, Inc., a g

Question

The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer: Direct material $2,100,000 Advertising expense 98,000 Depreciation on factory building 116,000 Direct labor: wages 490,000 Cost of finished goods inventory at year-end 115,000 Indirect labor: wages 141,000 Production supervisor’s salary 47,000 Service department costs* 100,000 Direct labor: fringe benefits 106,000 Indirect labor: fringe benefits 31,000 Fringe benefits for production supervisor 10,000 Total overtime premiums paid 55,000 Cost of idle time: production employees§ 40,000 Administrative costs 150,000 Rental of office space for sales personnel† 15,000 Sales commissions 5,000 Product promotion costs 10,000 *All services are provided to manufacturing departments. §Cost of idle time is an overhead item; it is not included in the direct-labor wages given above. †The rental of sales space was made necessary when the sales offices were converted to storage space for raw material. Required: 1. Compute each of the following costs for the year just ended: 1)TOTAL PRIME COSTS 2)TOTAL MANUFACTORIN OVERHEAD COSTS 3)TOTAL CONVERSION COSTS 4)TOTAL PRODUCT COSTS 5)TOTAL PERIOD COSTS

Explanation / Answer

Prime cost: Direct Material cost 2,100,000 Direct labour cost 490,000 Fringe benefits of direct labour 106000 Prime Cost 2,696,000 Total manufacturing Overheads: Depreciation on Factory Equipment 116000 Indirect wages 141000 Production Supervision wages 47000 Service department cost 100,000 Fringe benefits of Indirect labour 31000 Fringe benefits of Supervisors 10000 Oertime premium 55000 Cost of Idle time 40000 Total manufacturing Overheads: 540,000 Total Conversion cost; Total direct labour cost (490000+106000) 596000 Total Manufacturing OH 540000 Total Conversion cost: 1136000 Total Product Cost: Prime cost 2696000 Add: manufacturing OH 540000 Total Product Cost: 3236000 Total Period cost: Advertising expense 98000 Admin cost 150000 Rent space 15000 Sales commission 5000 Product promotion cost 10000 Total Period cost: 278000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.