Question

Problem: Cactus Cookies incurred the following costs this month to manufacture 1,000 jumbo chocolate chip cookies. Chocolate chips $750 Flour $2,200 Butter $48 Sugar $300 Other ingredients $27 Labor wages $300 Rent on manufacturing space $2500 Utilities (paid at a monthly rate) $520 Depreciation on kitchen equipment $880 Advertising $1000 Machine maintenance costs $500 President salary $2000

Calculate each of the following:

The total Direct Material costs this month

The total Direct Labor costs this month

The total Overhead costs this month

The total Manufacturing costs this month

The total Prime costs.

The total Conversion costs.

The total Period costs.

Answer 1

Particulars	Amount	Bifurcation
Choclate Chips	750	Direct Materials
Flour	2200	Direct Materials
Butter	48	Direct Materials
Sugar	300	Direct Materials
Other Ingredients	27	Direct Materials
Labour Wages	300	Direct Labour
Rent on Manufacturing Space	2500	Period Cost
Utilities ( Monthly Rate)	520	Period Cost
Depreciation on Kitchen Equipment	880	Period Cost
Advertising	1000	Period Cost
Machine Maintenance Cost	500	Overhead Cost
President Salary	2000	Period Cost
Manufacturing Cost = Direct Material + Direct Labour + Overhead Cost
Conversion Cost = Direct Labour + Overhead Cost
Period Cost = A Kind of Fixed cost incurred inrrespective of production
Prime Cost = Direct Material + Direct Labour

Partculars	Amount
Direct Material Cost	3325
Direct Labour Cost	300
Overhead Cost	500
Manufacturing Cost	4125
Prime Cost	3625
Conversion Cost	800
Period Cost	6900