Question

Alameda Manufacturing manufactures a variety of wooden picture frames using recycled wood from old barns. Alameda Manufacturing has reported the following costs for the previous year. Assume no production inventories.Advertising………………………………………………………………….. $25,600Cost of hardware (hangers, decorations, etc)…………….… $42,300Cost of wood…………………………………………………………..... .$121,200Depreciation on production equipment…………………….... $32,000Factory property taxes……………………………………………….....$15,500Factory rent……………………………………………………………..….. $50,000Glue……………………………………………………………………...…….… $3,030Production supervisor salary…………………………………….. $41,200Sales manager salary…………………………………………………. $41,500Utilities for factory………………………………………………………. $27,800Wages for maintenance workers.......................................$33,200Wages of assembly workers..............................................$87,400Wages of finishing workers...............................................$74,100A compute the direct material cost 1a.____ $163,500 _______Compute the direct labor cost. 1b.________ $161,500 ________Compute the manufacturing overhead. 1c.____ $232,730 ______Compute the total manufacturing cost. 1d.____ $557,730 _____Compute the prime cost. 1e_________$325,000 ______Compute the conversion cost. 1f.____ $394,230 _____Compute the total period cost 1g.____ $67,100 ________

Answer 1

Direct Material Cost

= Cost of hardware + cost of wood

= 42,300 + 121,200

= $‭163,500‬

Direct labor

= Wages of Assembly workers + Finishing workers

= 87,400 + 74,100

= $‭161,500‬

Manufacturing Overhead

= Depreciation + Factory prop. taxes + Factory rent + Glue + Production Supervisor salary + Utilities for factory + Wages for maintenance workers

= 32,000 + 15,500 + 50,000 + 3,030 + 41,200 + 27,800 + 33,200

= $‭202,730‬

Prime Cost

= Direct labor + Direct material

= 161,500 + 163,500

= $‭325,000‬

Conversion Cost

= Direct labor + Manufacturing Overhead

= 161,500 + 202,730

= $‭364,230‬

Total Period Cost

= Advertising + Sales Manager's salary

= 25,600 + 41,500

= $‭67,100‬