Question

Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2015:

Factory rent $ 37,700
Company advertising 25,500
Wages paid to seamstresses 76,800
Depreciation on salespersons' vehicles 30,600
Thread 1,030
Utilities for factory 24,700
Cutting room supervisor's salary 30,300
President’s salary 76,500
Premium quality cotton material 40,200
Buttons 835
Factory insurance 18,500
Depreciation on sewing machines 7,400
Wages paid to cutters 50,000

Required:
1. Compute the cost of direct materials for Cotton White.

2. Compute the cost of direct labor for Cotton White.



3. Compute the cost of manufacturing overhead for Cotton White.



4. Compute the total manufacturing cost for Cotton White.



5. Compute the prime cost for Cotton White.



6. Compute the conversion cost for Cotton White.



7. Compute the total period cost for Cotton White.

Answer 1

The cost computations for Cotton White, Inc., include direct materials of $42,065, direct labor of $126,800, manufacturing overhead of $118,600, total manufacturing cost of $287,465, prime cost of $168,865, conversion cost of $245,400, and total period cost of $132,600.

Step-by-step explanation:

The student is asking to compute various costs incurred by Cotton White, Inc., including direct materials, direct labor, manufacturing overhead, total manufacturing cost, prime cost, conversion cost, and total period cost.

1. Direct materials cost: This includes all the raw materials used in the production that can be directly traced to the goods being produced. In this case, it is the sum of the cost of premium quality cotton material ($40,200), thread ($1,030), and buttons ($835), which equals $42,065.
2. Direct labor cost: This represents the cost of wages paid to employees who directly work on the products. For Cotton White, this includes wages paid to seamstresses ($76,800) and cutters ($50,000), totaling $126,800.
3. Manufacturing overhead cost: This includes all production costs except direct materials and direct labor. Here, it is the sum of factory rent ($37,700), utilities for the factory ($24,700), cutting room supervisor's salary ($30,300), factory insurance ($18,500), and depreciation on sewing machines ($7,400), totaling $118,600.
4. Total manufacturing cost: It is the sum of direct materials, direct labor, and manufacturing overhead, coming to $287,465.
5. Prime cost: This is the sum of direct materials and direct labor, which is $168,865.
6. Conversion cost: This is the sum of direct labor and manufacturing overhead, totaling $245,400.

Answer 2

Instruction are listed below

Step-by-step explanation:

A) Cost of raw materials:

Cost of raw materials= Thread + Premium quality cotton material + Buttons= 1030 + 40200 + 835 = $42065

B) Direct labor= Wages paid to seamstresses + Cutting room supervisor's salary + Wages paid to cutters= 76800 + 30300 + 50000= $157100

C) Cost of manufacturing overhead= Factory rent + Utilities for factory + Factory insurance + Depreciation on sewing machines= 37700 + 24700 + 18500 + 7400= $88300

Expenses that are outside of the manufacturing facilities, such as selling, general and administrative expenses, are not product costs. They are reported as expenses on the income statement in the accounting period in which they occur.

D) total manufacturing cost= 42065 + 157100 + 88300= $287465

E) prime cost= direct materials + direct labor = 42065 + 157100= 199165

F) conversion cost= direct labor + manufactirng overhead= 157100 + 88300= 245400

G) Total period cost= Company advertising + Depreciation on salespersons' vehicles + President’s salary = 25500 + 30600 + 76500 = $132600