Q:

The following information is available for Wonderway, Inc., for 2015:Factory rent $ 29,300 Company advertising 20,800 Wages paid to laborers 85,000 Depreciation for president's vehicle 8,150 Indirect production labor 2,000 Utilities for factory 30,000 Production supervisor's salary 31,300 President's salary 61,800 Direct materials used 35,800 Sales commissions 7,500 Factory insurance 14,000 Depreciation on factory equipment 27,800 Required:1. Calculate the direct labor cost for Wonderway.2. Calculate the manufacturing overhead cost for Wonderway.3. Calculate the prime cost for Wonderway.4. Calculate the conversion cost for Wonderway.5. Calculate the total manufacturing cost for Wonderway.6. Calculate the period expenses for Wonderway.

Accepted Solution

A:
Answer:1) Direct labor cost = $85,0002) Manufacturing overhead cost  = $134,4003) Prime cost for Wonderway = $120,8004)  Conversion cost = $219,4005) Total manufacturing cost  = $255,2006) Period expenses = $98,250Step-by-step explanation:1) Direct labor cost will include:Wages paid to laborers = $85,000Therefore, Direct labor cost = $85,0002) The manufacturing overhead cost for Wonderway will include the sum ofFactory rent                                                          $29,300Indirect production labor                                       $2,000Utilities for factory                                                $30,000Production supervisor's salary                             $31,300Factory insurance                                                  $14,000Depreciation on factory equipment                     $27,800 --------------------------------------------------------------------------------Manufacturing overhead cost                           $134,400---------------------------------------------------------------------------------3) The prime cost for Wonderway will includeWages paid to laborers                                       $85,000Direct materials used                                          $35,800---------------------------------------------------------------------------------Prime cost for Wonderway                               $120,800----------------------------------------------------------------------------------4) The conversion cost for Wonderway will includeWages paid to laborers                                      $85,000Manufacturing overhead cost                            $134,400---------------------------------------------------------------------------------- Conversion cost                                                 $219,400----------------------------------------------------------------------------------5) The total manufacturing cost for Wonderway will includePrime cost for Wonderway                               $120,800Manufacturing overhead cost                           $134,400---------------------------------------------------------------------------------Total manufacturing cost                                 $255,200---------------------------------------------------------------------------------6) The period expenses for Wonderway will includeCompany advertising                                        $20,800Depreciation for president's vehicle                $8,150President's salary                                              $61,800Sales commissions                                            $7,500---------------------------------------------------------------------------------Period expenses                                               $98,250---------------------------------------------------------------------------------