Question

In: Accounting

Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about...

Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy’s costs for the most recent month.

Depreciation on factory equipment $ 800
Depreciation on CEO's company car 160
Speakers used in the keyboard 1,190
Production supervisor's salary 2,200
Glue and screws used in the keyboards 260
Wages of persons who install the speakers 2,950
Cost to run an ad on local radio stations 695
Utilities for the factory 1,260
Personnel manager's salary 2,590
Wages of person who attaches legs to keyboards 2,090

Required:

1. Calculate the total product cost for Noteworthy.

2. Calculate the prime cost for Noteworthy.

3. Calculate the manufacturing overhead for Noteworthy.

4. Calculate the direct labor for Noteworthy.

5. Calculate the conversion cost for Noteworthy.

6. Calculate the total variable cost (with number of units produced as the activity) for Noteworthy.

7. Calculate the total fixed cost (with number of units produced as the activity) for Noteworthy.

Solutions

Expert Solution

Computation of Total Product Cost
Direct material
Speakers used in keyboard $1,190
Direct labor
Wages of persons who instal speakers $2,950
Wages of persons who attach legs to keyboard $2,090
Total direct labor cost $5,040
Manufacturing overhead
Depreciation on factory equipment $800
Production supervisors salary $2,200
Glue and screws used in keyboard $260
Utilities for the factory $1,260
Total manufacturing overhead $4,520
Total product cost for the company $10,750
Computation of Prime Cost
Direct material cost $1,190
Direct labor cost $5,040
Prime cost $6,230
Computation of Conversion Cost
Direct labor cost $5,040
Manufacturing overhead cost $4,520
Conversion cost $9,560
Computation of Total Variable   Cost
Direct material $1,190
Direct labor $5,040
Glue and screws used in keyboard $260
Utilities for the factory $1,260
Total variable cost $7,750
Computation of Total Fixed Cost
Depreciation on factory equipment $800
Production supervisor salary $2,200
Depreciation on CEO's company car $160
Cost to run ad on local radio station $695
Personnel manager's salary $2,590
Total fixed cost $6,445

ekkarill92 answered 2 years ago
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