Chapter 3 Exercise 2 3. Definitions of manufacturing concepts Interstate Manufac

ID: 2376113 • Letter: C

Question

Chapter 3 Exercise 2

3. Definitions of manufacturing concepts

Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:

Materials and supplies used

Brass $75,000

Repair parts 16,000

Machine lubricants 9,000

Wages and salaries Machine operators 128,000

Production supervisors 64,000

Maintenance personnel 41,000

Other factory overhead Variable 35,000

Fixed 46,000

Sales commissions 20,000

Compute:

a. Total direct materials consumed

b. Total direct labor

c. Total prime cost

d. Total conversion cost

material(brass) - 75000

material consumed= 75000

d.labour(Wages and salaries Machine operators)= 128000

prime cost = mat consumed + d.labour= 128000+75000=203000

+factory oh (fixed)=46000

(variable)=35000

machine lubricants = 9000

repairs=16000

production supervisors = 64000

factory cost(prime cost +factory oh's) =373000

+admin oh's

Maintenance personnel 41,000

cost of production(factory cost+admin oh's)=414000

+selling and distribution oh

sales comm= 20000

total cost (cost of production + sales comm) =434000

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