10.000 points Cotton White, Inc., makes specialty clothing for chefs. The compan

Question

10.000 points Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2012 Factory rent $42,000 18,000 Company advertising 75,000 Wages paid to seamstresses Depreciation on salespersons' vehicles 25,000 1,000 Thread Utilities for factory 22,000 30,000 Cutting room supervisors salary 75,000 President's salary 42,000 Premium quality cotton material 750 Buttons 15,000 Factory insurance 6.000 Depreciation on sewing machines 50.000 Wages paid to cutters Required: 1. Compute the cost of direct materials for Cotton White Direct Materials Cost

Explanation / Answer

1

Compute the cost of direct materials for Cotton White

.$Direct Materials Cost $ 42,930

( Premium quality cotton material =42,000 + Buttons 750+ Thread 180)

.

2

Compute the cost of direct labor for Cotton White.

$Direct Labor Cost 125,500

( Wages paid to seamstresses 75000+ Wages paid to cutters 50000)

.

3

Compute the cost of manufacturing overhead for Cotton White.

$Manufactturing overhead cost = $ 115,000

Factory rent$42,000

Utilities for factory22,000

Factory insurance15,000

Depreciation on sewing machines6,000

Cutting room supervisor's salary30,000

4

Compute the total manufacturing cost for Cotton White.

$Total Manufacturing Cost 283,430

(42930+125500+115000)

5.

Compute the prime cost for Cotton White.$

Prime Cost $ 168,430

(125500+42930)

6

Conversion Cost

Total Conversion cost $ 240,500

(125500+115000)

7

Total Perod cost = $ 118,000

Company advertising18,000

Depreciation on salespersons' vehicles25,000

President’s salary75,000

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