question archive Top Shelf Company builds oak bookcases
Top Shelf Company builds oak bookcases
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Top Shelf Company builds oak bookcases. Assume that you have the following information about Top Shelf’s costs for the most recent month:
| Depreciation on factory equipment | $ | 1,800 |
| Depreciation on delivery trucks | 800 | |
| Wood used to build bookcases | 1,500 | |
| Production supervisor’s salary | 2,800 | |
| Glue and screws used in the bookcases | 250 | |
| Wages of persons who assemble the bookcases | 2,500 | |
| Cost to run an ad on local radio stations | 600 | |
| Rent for the factory | 3,500 | |
| CEO’s salary | 3,000 | |
| Wages of person who sands the wood after it is cut | 1,600 | |
| Required: |
| Determine each of the following costs for Top Shelf. |
1. Direct materials used:
2. Direct Labor:
3. Manufacturing Overhead:
4. Prime Cost:
5. Conversion Cost:
6. Total Manufacturing Cost:
7. Total Nonmanufacturing (period) Cost:
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Answer:
| Details | Amt $ | ||
| 1.00 | Direct Material | ||
| Wood used to build bookcases | 1,500 | ||
| Total Direct Material | 1,500 | ||
| 2.00 | Direct Labor | ||
| Wages of persons who assemble the bookcases | 2,500.00 | ||
| Wages of person who sands the wood after it is cut | 1,600.00 | Assumed direct labor | |
| Total Direct Labor cost | 4,100.00 | ||
| 3.00 | Manufacturing Overhead | ||
| Depreciation on factory equipment | 1,800.00 | ||
| Production supervisor’s salary | 2,800.00 | ||
| Glue and screws used in the bookcases | 250.00 | Assumed ndirect material | |
| Rent for the factory | 3,500.00 | ||
| Total Manufacturing Overhead | 8,350.00 | ||
| 4.00 | Prime cost | ||
| Direct Material | |||
| Wood used to build bookcases | 1,500.00 | ||
| Total Direct Material | 1,500.00 | ||
| Direct Labor | |||
| Wages of persons who assemble the bookcases | 2,500.00 | ||
| Wages of person who sands the wood after it is cut | 1,600.00 | ||
| Total Direct Labor cost | 4,100.00 | ||
| Prime Cost=Direct Material+Direct Labor cost | 5,600.00 | ||
| 5.00 | Convesrion Cost | ||
| Total Direct Labor cost | 4,100.00 | ||
| Total Manufacturing Overhead | 8,350.00 | ||
| Total Convesrion cost | 12,450.00 | ||
| 6.00 | Total Manufacturing Cost | ||
| Total Direct Material | 1,500.00 | ||
| Total Direct Labor cost | 4,100.00 | ||
| Total Manufacturing Overhead | 8,350.00 | ||
| Total Manufacturing Cost | 13,950.00 | ||
| 7.00 | Total period cost | ||
| Depreciation on delivery trucks | 800 | ||
| Cost to run an ad on local radio stations | 600.00 | ||
| CEO’s salary | 3,000.00 | ||
| Total period cost | 4,400.00 | ||
