The following cost data for the year just ended pertain to
Sentiments, Inc., a greeting card manufacturer:
*All services are provided to manufacturing departments.
§Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.
Compute each of the following costs for the year just ended
a.Total prime cost
Total manufacturing overhead costs
Total conversion costs
Total product costs
Total period costs
| Direct material | $ | 2,200,000 | |
| Advertising expense | 98,000 | ||
| Depreciation on factory building | 115,000 | ||
| Direct labor: wages | 535,000 | ||
| Cost of finished goods inventory at year-end | 115,000 | ||
| Indirect labor: wages | 142,000 | ||
| Production supervisor’s salary | 47,000 | ||
| Service department costs* | 100,000 | ||
| Direct labor: fringe benefits | 99,000 | ||
| Indirect labor: fringe benefits | 30,000 | ||
| Fringe benefits for production supervisor | 11,000 | ||
| Total overtime premiums paid | 55,000 | ||
| Cost of idle time: production employees§ | 40,000 | ||
| Administrative costs | 150,000 | ||
| Rental of office space for sales personnel† | 15,000 | ||
| Sales commissions | 6,000 | ||
| Product promotion costs | 10,000 | ||
§Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.
Compute each of the following costs for the year just ended
a.Total prime cost
Total manufacturing overhead costs
Total conversion costs
Total product costs
Total period costs
