An airline manufacturer incurred the following costs last month (in thousands of
ID: 2438393 • Letter: A
Question
An airline manufacturer incurred the following costs last month (in thousands of dollars) EEB (Click the icon to view the costs.) Read the requirements Requirement 1. Assuming the cost object is an airplane, classify each cost as one of the following direct material (DM), direct labor (DL), indirect labor (L) indirect materials (IM), other manufacturing overhead (other MOH), or period cost What is the total for each type of cost? (Enter currency amounts in thousands and not in dollars. If a box is not used in the table leäve the box empty do not enter a zero) Other DM DL MMOH Period a Airplane seats c Depreciation on forkifts in factory d Machine lubricants e. Factory janitors wages f Assembly workers wages g Property tax on corporate marketing officesExplanation / Answer
Requirement 1:
Other
DM
DL
IM
IL
MOH
Period
Airplane seats
$250
Production supervisor's salary
$130
Depreciation on forklifts in factory
$110
Machine lubricants
$45
Factory janitors wages
$10
Assembly workers wages
$630
Property tax on corporate marketing office
$35
Plant utilities
$200
Cost of warranty repairs
$230
Machine operators health insurance
$65
Depreciation on administrative office
$50
Cost of designing new plant layout
$165
Jet engine
$1,200
Total
$1,450
$695
$45
$140
$310
$480
Requirement 2:
Indirect material + Indirect labor + other Manufacturing overhead = Total manufacturing overhead cost
$ 45 + $ 140 + $ 310 = $ 495
Requirement 3:
Direct material + Direct labor + Total manufacturing overhead = Product cost
$ 1,450 + $ 695 + $ 495 = $ 2,640
Requirement 4:
Direct material + Direct labor = Prime cost
$ 1,450 + $ 695 = $ 2,145
Requirement 5:
Direct material + Total manufacturing overhead = Total conversion cost
$ 1,450 + $ 495 = $ 1,945
Requirement 6:
Total periodic cost = $ 480
Other
DM
DL
IM
IL
MOH
Period
Airplane seats
$250
Production supervisor's salary
$130
Depreciation on forklifts in factory
$110
Machine lubricants
$45
Factory janitors wages
$10
Assembly workers wages
$630
Property tax on corporate marketing office
$35
Plant utilities
$200
Cost of warranty repairs
$230
Machine operators health insurance
$65
Depreciation on administrative office
$50
Cost of designing new plant layout
$165
Jet engine
$1,200
Total
$1,450
$695
$45
$140
$310
$480
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