3. Definitions of manufacturing concepts
Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:
Materials and supplies used
Brass $75,000
Repair parts 16,000
Machine lubricants 9,000
Wages and salaries Machine operators 128,000
Production supervisors 64,000
Maintenance personnel 41,000
Other factory overhead Variable 35,000
Fixed 46,000
Sales commissions 20,000
Compute:
a. Total direct materials consumed
b. Total direct labor
c. Total prime cost
d. Total conversion cost
I have never figured out why UOP students pay such an exorbant price for such a lousy "education", then graze for answers to assignments.
oh, my apologies
Definitions of manufacturing concepts
Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:
Materials and supplies used
Brass $75,000
Repair parts 16,000
Machine lubricants 9,000
Wages and salaries Machine operators 128,000
Production supervisors 64,000
Maintenance personnel 41,000
Other factory overhead Variable 35,000
Fixed 46,000
Sales commissions 20,000
Compute:
a. Total direct materials consumed
b. Total direct labor
c. Total prime cost
d. Total conversion cost
To compute the answers to the given questions, we need to understand the definitions of certain manufacturing concepts. Let's go through each concept step by step and compute the values accordingly.
a. Total direct materials consumed:
Direct materials are the materials that are directly used in the manufacturing process and can be easily traced to the finished product. In this case, the direct materials are brass, repair parts, and machine lubricants.
To calculate the total direct materials consumed, simply add up the costs of these materials:
Total direct materials consumed = Cost of brass + Cost of repair parts + Cost of machine lubricants
= $75,000 + $16,000 + $9,000
= $100,000
b. Total direct labor:
Direct labor includes the wages and salaries paid to the workers directly involved in the manufacturing process. In this case, the direct labor cost is the wages and salaries of machine operators, production supervisors, and maintenance personnel.
To calculate the total direct labor cost, add up the wages and salaries for these positions:
Total direct labor = Wages and salaries of machine operators + Wages and salaries of production supervisors + Wages and salaries of maintenance personnel
= $128,000 + $64,000 + $41,000
= $233,000
c. Total prime cost:
Prime cost is the sum of the total direct materials consumed and the total direct labor cost. In other words, it encompasses the costs directly related to the manufacturing of the product.
To calculate the total prime cost, add up the total direct materials consumed and the total direct labor:
Total prime cost = Total direct materials consumed + Total direct labor
= $100,000 + $233,000
= $333,000
d. Total conversion cost:
Conversion cost includes all the costs incurred to convert the raw materials into the finished product. It includes the direct labor cost as well as the factory overhead costs (both variable and fixed).
To calculate the total conversion cost, add up the total direct labor cost, variable factory overhead, and fixed factory overhead:
Total conversion cost = Total direct labor + Variable factory overhead + Fixed factory overhead
= $233,000 + $35,000 + $46,000
= $314,000
Therefore:
a. Total direct materials consumed = $100,000
b. Total direct labor = $233,000
c. Total prime cost = $333,000
d. Total conversion cost = $314,000