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In: Accounting

Quail Company builds snowboards. Quail Company has reported the following costs for the previous year. Assume...

Quail Company builds snowboards. Quail Company has reported the following costs for the previous year. Assume no production inventories.

Cost of fiberglass (raw material) $ 94,000
Factory rent $ 49,000
Advertising $ 135,000
Utilities for factory $ 26,000
Wages of assembly workers $ 88,000
Production supervisor salary $ 50,000
Sales manager salary $ 34,000
Factory property taxes $ 29,000
Depreciation on production equipment $ 28,000
Cost of bindings (raw material) $ 23,000
Screws $ 2,500
Wages of snowboard painters $ 76,000
Wages for maintenance workers $ 31,000

a. Compute the direct material costs.

b. Compute the direct labor cost.

c. Compute the manufacturing overhead.

d. Compute the total manufacturing cost.

e. Compute the prime cost.

f. Compute the conversion cost.

g. Compute the total period cost.

Solutions

Expert Solution

a. Direct material cost:
      Cost of fibreglass 94000
      Cost of bindings 23000
    Direct material cost 117000
b. Direct labor cost:
       Wages for assembly workers 88000
     Wages for snowboard painters 76000
     Direct labor cost 164000
c. Manufacturing overhead:
         Factory rent 49000
         Utilities for factory 26000
         Production supervisor salary 50000
         Factory property taxes 29000
         Depreciation on production equipment 28000
         Screws 2500
         Wages for maintenance workers 31000
    Manufacturing overhead 215500
d. Total manufacturing cost
         Direct material cost 117000
         Direct labor cost 164000
         Manufacturing overhead 215500
    Total manufacturing overhead 496500
e. Prime cost
         Direct material cost 117000
         Direct labor cost 164000
    Prime cost 281000
f. Conversion cost
         Direct labor cost 164000
         Manufacturing overhead 215500
     Conversion cost 379500
g. Total period cost
        Advertising 135000
        Sales manager's salary 34000
     Total period cost 379500

ekkarill92 answered 1 year ago
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