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	$	850
Depreciation on CEO's company car		190
Speakers used in the keyboard		1,170
Production supervisor's salary		2,270
Glue and screws used in the keyboards		260
Wages of persons who install the speakers		2,840
Cost to run an ad on local radio stations		625
Utilities for the factory		1,250
Personnel manager's salary		2,580
Wages of person who attaches legs to keyboards		2,130
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

1. Total Production cost	10770
2. Prime cost	6140
3.Manufacturing overhead	4630
4.Direct labor	4970
5.Conversion cost	9600
6.Total variable cost	7650
7.Total fixed cost	6515


Workings:

Direct material
Speakers used in keyboard	1170

Direct labor
Wages of persons who instal speakers	2840
Wages of persons who attach legs to keyboard	2130
Total direct labor cost	4970

Manufacturing overhead
Depreciation on factory equipment	850
Production supervisors salary	2270
Glue and screws used in keyboard	260
Utilities for the factory	1250
Total manufacturing overhead	4630

Total product cost for the company
Direct material cost	1170
Direct labor cost	4970
Manufacturing overhead cost	4630
Total product cost	10770

Prime cost
Direct material cost	1170
Direct labor cost	4970
Prime cost	6140

Conversion cost
Direct labor cost	4970
Manufacturing overhead cost	4630
Conversion cost	9600

Total variable cost
Direct material	1170
Direct labor	4970
Glue and screws used in keyboard	260
Utilities for the factory	1250
Total variable cost	7650

Total fixed cost
Depreciation on factory equipment	850
Production supervisor salary	2270
Depreciation on CEO's company car	190
Cost to run ad on local radio station	625
Personnel manager's salary	2580
Total fixed cost	6515

ekkarill92 answered 1 year ago

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