The following cost data for the year just ended pertain to Sentiments, Inc., a g
ID: 2605023 • Letter: T
Question
The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:
Compute
Total Prime costs
Total Manufacturing overhead costs
Total conversion
total product costs
total period costs
Direct material $ 2,200,000 Advertising expense 97,000 Depreciation on factory building 116,000 Direct labor: wages 465,000 Cost of finished goods inventory at year-end 115,000 Indirect labor: wages 141,000 Production supervisor’s salary 45,000 Service department costs* 100,000 Direct labor: fringe benefits 118,000 Indirect labor: fringe benefits 31,000 Fringe benefits for production supervisor 11,000 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 4,000 Product promotion costs 10,000Compute
Total Prime costs
Total Manufacturing overhead costs
Total conversion
total product costs
total period costs
Explanation / Answer
Direct material
$2200000
Direct Labor:
Wages
465000
Fringe benefits
118000
Total prime costs
$1617000
Total Prime Cost:
Total manufacturing overhead:
Depreciation on factory building
$116000
Indirect labor: wages
141000
Production supervisor’s salary
45000
Service department’s costs
100000
Indirect labor: Fringe benefits
31000
Fringe benefits for production supervisor
11000
Total overtime premiums paid
55000
Cost of idle time: production employees
40000
Total manufacturing overhead
$539000
Total Conversion costs:
Direct labor($465000 + $118000)
$583000
Manufacturing overhead
539000
Total Conversion costs
$1122000
Total Product Costs:
Direct material
$2200000
Direct labor
583000
Manufacturing overhead
539000
Total Product costs
$3322000
Total Period Costs:
Advertising Expense
$97000
Administrative costs
150000
Rental of office space for sales personnel
15000
Sales commissions
4000
Product promotion costs
10000
Total Period Costs
$276000
Direct material
$2200000
Direct Labor:
Wages
465000
Fringe benefits
118000
Total prime costs
$1617000
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