The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer: Direct material$2,300,000 Advertising expense 98,000 Depreciation on factory building 117,000 Direct labor: wages 500,000 Cost of finished goods inventory at year-end 115,000 Indirect labor: wages 141,000 Production supervisor’s salary 45,000 Service department costs* 100,000 Direct labor: fringe benefits 102,000 Indirect labor: fringe benefits 31,000 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 4,000 Product promotion costs 10,000 *All services are provided to manufacturing departments.§Cost 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. Computea. Total prime costb. Total manfacturing overhead costsc. Total conversion costsd. Total product costse. Total period costs

a. Direct material 2,300,000 Direct labor: wages 500,000 Direct…

Answered: a. Total prime cost b. Total…

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 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:


Direct material	$	2,300,000
Advertising expense		98,000
Depreciation on factory building		117,000
Direct labor: wages		500,000
Cost of finished goods inventory at year-end		115,000
Indirect labor: wages		141,000
Production supervisor’s salary		45,000
Service department costs*		100,000
Direct labor: fringe benefits		102,000
Indirect labor: fringe benefits		31,000
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		4,000
Product promotion costs		10,000

*All services are provided to manufacturing departments.
§Cost 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.

Compute

a. Total prime cost

b. Total manfacturing overhead costs

c. Total conversion costs

d. Total product costs

e. Total period costs

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