Question

San Tan Company manufactures light bulbs. Once produced, the bulbs are packaged and sold to wholesalers for distribution to grocery stores and large retailers like Walmart. The following costs were incurred by San Tan Company during April:

Electricity for factory	$	14,700
Labor		29,900
Rent on factory		21,900
Insurance on factory		1,200
Glass for bulbs		54,100
Cardboard for packaging		5,900

Compute the Manufacturing overhead cost for San Tan Company.

Compute the Direct materials cost for San Tan Company.

Compute the Conversion cost for San Tan Company.

Answer 1

Computation of Manufacturing overheads
Particulars	Amount
Electricity for factory	$        14,700
Rent on factory	$        21,900
Insurance on factory	$          1,200
Total of Manufacturing overheads (14700+21900+1200)	$        37,800

Computation of Direct Material costs
Particulars	Amount
Glass for bulbs	$        54,100
Cardboard for packaging	$          5,900
Total of Direct Material costs (54100+5900)	$        60,000

Computation of Conversion costs
Particulars	Amount
Labor	$        29,900
Manufacturing overheads	$        37,800
Total of conversion costs (29900+37800)	$        67,700