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The following information is available for Wonderway, Inc., for 2015:

Factory rent $29,600
Company advertising 20,700
Wages paid to laborers 84,000
Depreciation for president's vehicle 8,180
Indirect production labor 1,860
Utilities for factory 30,100
Production supervisor's salary 30,800
President's salary 62,000
Direct materials used 36,200
Sales commissions 7,700
Factory insurance 12,200
Depreciation on factory equipment 26,600

Required:
a. Calculate the direct labor cost for Wonderway.
b. Calculate the manufacturing overhead cost for Wonderway.
c. Calculate the prime cost for Wonderway.
d. Calculate the conversion cost for Wonderway.
e. Calculate the total manufacturing cost for Wonderway.
f. Calculate the period expenses for Wonderway.

User Rotareti
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1 Answer

7 votes

Answer: See explanation

Step-by-step explanation:

a. Calculate the direct labor cost for Wonderway.

This will be the wages paid to laborers which is $84,000.

b. Calculate the manufacturing overhead cost for Wonderway.

Factory rent = $29,600

Add: Indirect production labor = $1,860

Add: Utilities for factory = $30,100

Add: Production supervisor's salary = $30,800

Add: Factory insurance = $12,200

Add: Depreciation on factory equipment = $26,600

Manufacturing overhead cost = $131160.

c. Calculate the prime cost for Wonderway.

Direct materials used = $36,200

Add: Wages = $84,000

Prime cost = $36200 + $84000 = $120200

d. Calculate the conversion cost for Wonderway.

Wages paid to laborers = $84,000

Add: Manufacturing overhead = $131160

Conversion cost = $215160

e. Calculate the total manufacturing cost for Wonderway.

Direct materials used = $36,200

Add: Wages paid to laborers = $84,000

Add: Manufacturing overhead = $131160

Total manufacturing cost = $251360

f. Calculate the period expenses for Wonderway.

Company advertising = $20,700

President's salary = $62,000

Add: Depreciation= $8,180

Add: Sales commissions = $7,700

Period cost = $98580

User OTZ
by
7.2k points