The following information is available for Wonderway Inc for

The following information is available for Wonderway, Inc., for 2015: Factory rent Company advertising Wages paid to laborers Depreciation for president\'s vehicle Indirect production labor Utilities for factory Production supervisor\'s salary President\'s salary Direct materials used Sales commissions Factory insurance Depreciation on factory equipment 28,900 19,900 85,200 8,140 1,870 30,300 32,000 60,900 34,700 7,650 13,500 27,600 Required 1. Calculate the direct labor cost for Wonderway irect Labor Cost 2. Calculate the manufacturing overhead cost for Wonderway. Manufacturing Overhead 3. Calculate the prime cost for Wonderway. ime Cost

Solution

1. Direct labour = Wages paid to labourers = $85200

2. Manufacturing overhead = factory rent + indirect production labour + utilities for factory + production supervisors salary + factory insurance + depreciation on factory equipment

          = $28900 + $1870 + $30300 + $32000 + $13500 + $27600 = $134170

3. Prime cost = Direct materials used + Wages paid to labours = $34700 + $85200 = $119900

4. Conversion cost = Wages paid to labours + Manufacturing Overheads = $85200 + $134170 = $219370

5. Total manufacturing cost = Direct materials used + Wages paid to labours + Manufacturing Overheads

                                         = $34700 + $85200 + $134170 = $254070

6. Period expenses = Company advertising + Depreciation for President\'s vechicle + President\'s salary + Sales commissions

   = $19900 + $8140 + $60900 + $7650 = $96590