Question

The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:

Direct material	$	2,200,000
Advertising expense		97,000
Depreciation on factory building		116,000
Direct labor: wages		465,000
Cost of finished goods inventory at year-end		115,000
Indirect labor: wages		141,000
Production supervisor’s salary		45,000
Service department costs*		100,000
Direct labor: fringe benefits		118,000
Indirect labor: fringe benefits		31,000
Fringe benefits for production supervisor		11,000
Total overtime premiums paid		55,000
Cost of idle time: production employees§		40,000
Administrative costs		150,000
Rental of office space for sales personnel†		15,000
Sales commissions		4,000
Product promotion costs		10,000
Compute Total Prime costs Total Manufacturing overhead costs Total conversion total product costs total period costs

Answer 1

Direct material	$2200000
Direct Labor:
Wages	465000
Fringe benefits	118000
Total prime costs	$1617000

Total Prime Cost:

Total manufacturing overhead:

Depreciation on factory building	$116000
Indirect labor: wages	141000
Production supervisor’s salary	45000
Service department’s costs	100000
Indirect labor: Fringe benefits	31000
Fringe benefits for production supervisor	11000
Total overtime premiums paid	55000
Cost of idle time: production employees	40000
Total manufacturing overhead	$539000

Total Conversion costs:

Direct labor($465000 + $118000)	$583000
Manufacturing overhead	539000
Total Conversion costs	$1122000

Total Product Costs:

Direct material	$2200000
Direct labor	583000
Manufacturing overhead	539000
Total Product costs	$3322000

Total Period Costs:

Advertising Expense	$97000
Administrative costs	150000
Rental of office space for sales personnel	15000
Sales commissions	4000
Product promotion costs	10000
Total Period Costs	$276000