Answered: design cost (school logo)" classifiy as…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Would "design cost (school logo)" classifiy as indirect or direct expense? explain

Should Design cost be added to calculate the prime cost? explain

Transcribed Image Text:Personal Protective Gears & More (PPGM) design and manufacture masks for students. After production, the masks are placed into individual cases, before being transferred into Finished Goods. The accounting records of the business reflect the following data at June 30, 2021, for the manufacturing of masks for Mount Marlie High School. 1/7/2020 30/6/2021 $260,000 $24,000 $203,300 $485,000 Inventory Raw Materials $230,000 $35,000 Factory Supplies Work in Progress $348,300 Finished Goods $632,900 Other information: Sales Revenue $5,731,000 64,000 Factory Supplies Purchased Direct Factory Labor Raw Materials Purchased 792,000 560,000 Plant janitorial service Depreciation: Plant & Equipment Total Utilities 1 Production Supervisor's Salary Design Costs (School Logo) Packaging Cases Cost Total Insurance 2 37,000 186,000 481,250 450,000 26,000 Delivery Vehicle Drivers' Wages Depreciation: Delivery Vehicle Property Taxes 3 Administrative Wages & Salaries Advertising & Selling Expenses 42,000 168,000 181,500 53,290 240,000 801,250 1% of Sales Revenue

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