Homework SourseYour friend Suzie Whitson has designed a new type of outdoor
Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow:
Required:
1. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH). (Select \"NA\" wherever necessary.)
2. Determine the total cost for each of the following:
a. Direct Materials
b. Direct Labor
c. Manufacturing Overhead
d. Prime Cost
e. Conversion Cost
f. Total Product Cost $55,915
| Factory rent | $ | 3,030 |
| Company advertising | 1,030 | |
| Wages paid to assembly workers | 31,800 | |
| Depreciation for salespersons’ vehicles | 2,060 | |
| Screws | 505 | |
| Utilities for factory | 805 | |
| Assembly supervisor’s salary | 3,530 | |
| Sandpaper | 115 | |
| President’s salary | 5,050 | |
| Plastic tubing | 4,130 | |
| Paint | 230 | |
| Sales commissions | 1,250 | |
| Factory insurance | 1,130 | |
| Depreciation on cutting machines | 2,140 | |
| Wages paid to painters | 8,500 | |
Solution
1.
2. a) Direct materials
b) Direct labour
c) Manufacturing overhead
d) Prime cost
Prime cost = direct material + direct labour
= 850+40300
= 41,150
e) Conversion cost = labour cost + manufacturing overhead
= 40300 + 14765
= $55,065
F. Total product cost = prime cost + manufacturing cost
= 41150 + 14765
= $55,915
| Particulars | Amount | Type of cost |
| Factory rent | 3,030 | Product cost/MOH |
| Company advertising | 1,030 | Period cost |
| Wages paid to assembly workers | 31,800 | Product cost/DL |
| Depreciation for salesperson vehicle | 2,060 | Period cost |
| screws | 505 | Product cost/DM |
| utilities for factory | 805 | Product cost/MOH |
| Assembly supervisors salary | 3,530 | Product cost/MOH |
| Sandpaper | 115 | Product cost/DM |
| Presidents salary | 5,050 | Period cost |
| Palstic tubing | 4,130 | Product cost/MOH |
| paint | 230 | Product cost/DM |
| Sales commission | 1,250 | Period cost |
| Factory insurance | 1,130 | Product cost/MOH |
| Depreciation on cutting machine | 2,140 | Product cost/MOH |
| Wages paid to painters | 8,500 | Product cost/DL |
