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In: Accounting

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 2 years ago
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