In: Accounting
Complete the following questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements. (All amounts in SAR except units.)
Given the following information for Dorttmund Corporation: |
|
Advertising costs |
320,000 |
Office rent |
240,000 |
Direct materials |
800,000 |
Delivery vehicle depreciation |
90,000 |
Factory repair and maintenance |
420,000 |
Sales salary |
510,000 |
Indirect labor |
220,000 |
Manufacturing equipment depreciation |
180,000 |
Administrative salaries |
360,000 |
President's salary |
700,000 |
Sales revenue |
5,200,000 |
Indirect materials |
190,000 |
Direct labor |
1,500,000 |
Machine hours |
2,000 |
Direct Labor hours |
10,000 |
Machine hours per unit |
3 |
Direct labor hours per unit |
6 |
Direct materials per unit |
? |
Units manufactured |
500 |
Units sold |
350 |
You must show all your work for credit.
solution a) period cost means cost which are not related to production of a product such as selling , adevertising cost ,adminisatarion expenses etc.
for easily understanding ask a question to itself that the cost is directly or indirectly related to production if answer is No then it is period cost .
particuilars | amount |
Advertising costs | 3,20,000 |
office rent | 2,40,000 |
Delivery vehicle depreciation | 90,000 |
sales salary | 5,10,000 |
Administrative salaries | 3,60,000 |
president's salary | 7,00,000 |
TOTAL PERIOD COST | 22,20,000 |
solution b)
overhead cost
Advertising costs 3,20,000
Administrative salaries = 3,60,000
indirect labour =220,000
indirect material = 190,000
office rent =2,40,000
president salary = 700000
sales salary = 5,10,000
total overhead = 25,40,000
machine hours =2000
overhead per machine hour = 25,40,000 / 2000
= 1270 per hour
unit manufactured =500
machine hour per unit =2000/500 = 4 hours per unit
overhead per unit based on machine hour = 4 x 1270 =5080