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

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


Factory rent	$	37,700
Company advertising		24,000
Wages paid to seamstresses		76,400
Depreciation on salespersons' vehicles		32,000
Thread		1,040
Utilities for factory		24,200
Cutting room supervisor's salary		31,300
President’s salary		75,400
Premium quality cotton material		40,500
Buttons		830
Factory insurance		18,000
Depreciation on sewing machines		7,600
Wages paid to cutters		51,000

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.

Solutions

Expert Solution

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

Premium quality cotton material=$40500

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

Wages paid to seamstresses	76400
Wages paid to cutters	51000
Direct Labor Cost	127400

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

Depreciation on sewing machines	7600
Factory insurance	18000
Buttons	830
Cutting room supervisor's salary	31300
Utilities for factory	24200
Thread	1040
Factory rent	37700
cost of manufacturing overhead	120670

4. Compute the total manufacturing cost for Cotton White.

=40500+127400+12067

=288570

5. Compute the prime cost for Cotton White.
Direct Material + Direct Labor

=40500+127400

=167900

6. Compute the conversion cost for Cotton White.

Direct Labor Cost +cost of manufacturing overhead
=127400+120670

=$248070

7. Compute the total period cost for Cotton White.

Company advertising	24000
Depreciation on salespersons' vehicles	32000
President’s salary	75400
total period cost	131400

ekkarill92 answered 1 year ago

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