PA14 Classifying Costs Calculating Total Costs Identifying I

PA1-4 Classifying Costs; Calculating Total Costs:; Identifying Impact of Misclassification [LO 1-4) 1,000 30,000 2,000 3,500 6.000 1.200 7.500

Solution

Computation of Total Cost of Product Detail Amount Amount Remark Direct Material ( A) Sandepaper $150 plastic lubing $4,200 screws $500 Paint $250 $5,100 Direc t Labour (B) Wages paid to painter $7,500 $7,500 Manufacturing Overhead ( C) Factory Rent $3,200 Company Advertising $1,000 This is related with selling and marketing expense will not considered ito calculate product cost Wages paid to assembly worker $30,000 Depreciation for sales person vehicle $2,000 This is related with selling and adminisatrative expense will not considered ito calculate product cost utilities for factory $900 Assembly supervisor salary $3,500 President salary $6,000 This is related with managerial and adminisatrative expense will not considered ito calculate product cost Sales Commission $1,200 This is related with selling and marketing expense will not considered ito calculate product cost Factory insurance $1,000 Depreciation on cutting machine $2,000 $50,800 Total Product cost ( A+B+C) $63,400 Direct material + Direct Labour + Manufacturing Overhead