14 The following costs were incurred in August: Direct Materials $25,000 Direct

Question

14

The following costs were incurred in August:

Direct Materials                                             $25,000

Direct Labor                                                 $20,000

Manufacturing (Factory) Overhead                $25,000

Selling and Administrative Expenses    $40,000

(1) What is the amount of the prime costs?

(2) What is the amount of the period costs?

(3) What is the amount of the conversion costs?

(4) What is the amount of the product costs?

15

If Ragged Edge Arts sells quilts and paintings, and it has estimated selling 50 quilts at $250 each and 42 paintings at $500 each, what are the estimated sales for next year?

Explanation / Answer

14 Amount of the prime costs = 25000+20000 =45000 Amount of the period costs = 40000 Amount of the conversion costs = 20000+25000 = 45000 Amount of the product costs = 25000+20000+25000 = 70000 15 Estimated sales = (50*250)+(42*500)= 33500

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