Direct material. $2,100,000 (LO 2-2, 2-5, 2-10 Advertising expense. 99,000 1(a). Total prime costs:$2,680,000 1(d). Manufacturing overhead:$534,000 Depreciation on factory building 115,000 Direct labor: wages. 485,000 Cost of finished goods inventory at year-end. 115,000 Indirect labor: wages 140,000 Production supervisor's salary. 45,000 Service department costs*. 100,000 Direct labor: fringe benefits 95,000 Indirect labor: fringe benefits 30,000 Fringe benefits for production supervisor. 9,000 Total overtime premiums paid 55,000 Cost of idle time: production employees 40,000 Administrative costs 150,000 Rental of office space for sales personnel". 15,000 Sales commissions 5,000 Product promotion costs. 10,000 "All services are provided to manufacturing departments. SCost of idle time is an overhead item; it is not included in the direct-labor wages given above. *The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.

Direct material. $2,100,000 (LO 2-2, 2-5, 2-10 Advertising expense. 99,000 1(a). Total prime costs:$2,680,000 1(d). Manufacturing overhead:$534,000 Depreciation on factory building 115,000 Direct labor: wages. 485,000 Cost of finished goods inventory at year-end. 115,000 Indirect labor: wages 140,000 Production supervisor's salary. 45,000 Service department costs. 100,000 Direct labor: fringe benefits 95,000 Indirect labor: fringe benefits 30,000 Fringe benefits for production supervisor. 9,000 Total overtime premiums paid 55,000 Cost of idle time: production employees 40,000 Administrative costs 150,000 Rental of office space for sales personnel". 15,000 Sales commissions 5,000 Product promotion costs. 10,000 "All services are provided to manufacturing departments. SCost of idle time is an overhead item; it is not included in the direct-labor wages given above. The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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