The L.A. dress shop produces custom designed dresses for retail sales on the premises. The shop sold 50 dresses last month. Costs incurred during the last month include e the following
Cost of fabrics used in dress ..............................................................................................$ 60,000
Wages of dressmakers ..............................................................................................................5,000
Wages of dress designers .........................................................................................................4,000
Wages of sales personnel .........................................................................................................1,000
Wages of designers who experiment with new fabrics and dress designs ..............................3,000
Wages of the employee who repairs the shop’s patterns and sewing machine .......................2,000
Salary of the owner’s assistant .................................................................................................1,200
Cost of the new sign displayed in front of retail shop ................................................................400
Cost of electricity used in the pattern department ......................................................................200
Depreciation on pattern machines and sewing machines.......................................................10,000
Cost of advertisements on local media .......................................................................................800
Cost of hiring a plane and a pilot to fly along the
beach pulling a banner advertising the shop ............................................................................1,400
Cost of insurance for the production employees .....................................................................2,000
Rent for the building .............................................................................................................6,000
Apportion the rent into different categories based on the following facts. Half of the building’s first floor is used for administrative offices. The other half of it is used for a retail shop. The second floor is used for marketing dresses and storing of raw materials
A. Classify these costs into one of the following categories: Direct materials cost, direct labor costs, indirect manufacturing costs, selling costs, marketing costs, research and development costs, and general and administrative costs. What is the total cost for each category?
B. Classify these costs as united-related, batch related product sustaining or business sustaining costs, what is the total cost for each category?