Factory rent 3140 Company advertising 1070
Wages paid to assembly workers 31000
Depreciation for salespersons' vehicles 2180
Screws 580
Utilities for factory 870
Assembly supervisor's salary 3520
Sandpaper President's salary 135
Plastic tubing 5040
Paint 4170
Sales commissions 225
Factory insurance 1210
Depreciation on cutting machines 1100
Wages paid to painters 2130
Determine the total cost for each of the following:
a. Direct Materials
b. Direct Labor
c. Manufacturing Overhead
d. Prime Cost
e. Conversion Cost
f. Total Product Cost

Answer and Explanation:

The computation is shown below:

a. The direct material cost is

Screws     $580  

Sandpaper $135  

Plastic Tubing $4170  

Paint $225  

Cost of Direct Material $5,110

b. The direct labor cost is

Wages paid to Assembly workers $31,000  

Assembly Supervisors Salary $3,520  

Wages paid to painters $8,200  

Cost of Direct Labor $42,720

d. The Prime Cost is

= Direct Labor + direct material

= $42,720  + $5,110

= $47,830

c. The Manufacturing Overheads is  

Factory Rent  $3,140  

Utilities for factory $870  

Factory Insurance $1,100  

Depreciation on cutting Machines $2,130

Manufacturing overhead cost $7,240

e. The conversion cost is

= Prime cost + manufacturing overhead  

= $47,830 + $7,240

= $55,070

f.  The total product cost is

= Conversion cost + Production cost + selling overhead

= $55,070 + $5,040 $1,070 + $2,180 + $1,210

= $64,570

answer; encouraging the development of innovations by firms attempting to break a monopoly; (creative destruction)

answer; competency based pay;