A Car Company had the following costs during January 2020 a) Classify each cost as either Direct
Question:
A Car Company had the following costs during January 2020
a) Classify each cost as either Direct Material (DM), Direct Labour (DL), Indirect Materials (IM), Indirect (Labour), Manufacturing Overhead (MOH) or period cost. Calculate the total for each type of cost.
• Manufacturing Workers Wages$125,000 = DL
• Plant utilities$7,000 = MOH
• Office utilities$550 = PC
• Plant/Manufacturing equipment depreciation$15,000 = MOH
• Depreciation of Office Equipment$1,800 = PC
• Manufacturing Supplies$3,500 = DM
• Engine parts$180,000 = DM
• Factory Janitor Wages$18,000 = MOH
• Property taxes on Manufacturing facility $4,500 = MOH
• Property taxes on Office building $500 = PC
• Office Workers Salaries $45,000 = PC
b) Calculate total Manufacturing overhead costs (3 marks)
= 7000 + 15000 + 4500 = 26500
c) Calculate total Inventoriable costs (2 marks)
d) Calculate total prime costs
e) Calculate total conversion costs (1 mark)
f) Calculate total period costs
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger