Question

In: Finance

Carleton Closures, Inc., manufactures clamps used in the overhead bin latches of several leading airplane models....

Carleton Closures, Inc., manufactures clamps used in the overhead bin latches of several leading airplane models. Greg Poole, president of Carleton Closures, Inc., has gathered the following cost information from the company’s accounting records for the latest month of operations.

Advertising $25,000
Fire insurance premium for the factory building $6,250
Sales office utilities $2,500
Air filters for the buffing machines used to produce the clamps $1,875
Aluminum used to produce the clamps $37,500
Rent on the factory building $10,000
Freight to ship the clamps to customers $3,125
Sales department executives’ salaries $42,500
Production supervisors’ salaries $22,500
Assembly line workers’ wages $60,000



(a) Calculate the total period costs for the month.




(b) Calculate the total product costs for the month.



(c) Calculate the amount of manufacturing overhead incurred for the month.

Solutions

Expert Solution

Ans.1 Total period cost     $73125
*Calculation:
Advertising 25000
Sales office utilities 2500
Freight to ship the clamps to customers 3125
Sales department executives' salaries 42500
Total 73125
Ans.2 Total Product cost     $138125
*Calculation:
Fire insurance premium for the factory building 6250
Air filters for the buffing machines used to produce the clamps 1875
Aluminum used to produce the clamps 37500
Rent on the factory building 10000
Production supervisors' salaries 22500
Assembly line workers' wages 60000
Total 138125
Ans.3 Total manufacturing overhead    $40625
*Calculation:
Fire insurance premium for the factory building 6250
Air filters for the buffing machines used to produce the clamps 1875
Rent on the factory building 10000
Production supervisors' salaries 22500
Total 40625

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