Cotton White, Inc. makes specialty clothing for chefs. The company reported the
ID: 2362294 • Letter: C
Question
Cotton White, Inc. makes specialty clothing for chefs. The company reported the following costs for 2009:
Factory rent $36,000 Company advertising 24,000 Wages paid to seamstresses 75,000 Depreciation on salespersons' vehicles 30,000 Thread 1,000 Utilities for factory 23,000 Cutting room supervisor's salary 30,000 President's salary 75,000 Premium quality cotton material 40,000 Buttons 750 Factory insurance 18,000 Depreciation on sewing machines 6,000 Wages paid to cutters 50,000
Explanation / Answer
uirement 1:
Compute the direct materials cost for Cotton White.
Premium quality cotton material $40,000
Buttons $750
Threads $1,000
Direct materials cost $41,750
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Wages paid to seamstresses $75,000
Wages paid to cutters $50,000
Direct labor cost $125,000
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Factory Rent $36,000
Utilities for factory $23,000
Cutting room supervisor's salary $30,000
Factory insurance $18,000
Depreciation on sewing machines $6,000
Manufacturing overhead $113,000
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Total current manufacturing cost $279,750
($41,750+$125,000+$113,000)
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Prime cost ($41,250 + $125,000) $166,250
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Conversion cost ($125,000 + $113,000) $238,000
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Company advertising $24,000
Depreciation on salespersons' vehicles $30,000
President's salary $75,000
Total period cost $129,000