ABC Inc. makes uniforms for elementary schools. The company reported the following costs for the current year: Rent $12,000 Advertising $20,000 Wages paid cutters $50,000 Cotton for uniforms $15.500 Thread $5.500 Utilities for Factory $26,000 Supervisor's Salary $40,000 Buttons $10,500 Factory Insurance $15,000 Wages paid to sewers $65,000 Compute the cost of manufacturing overhead for ABC Inc. O $89,000 O $124.500 O $109,000 O $69,000

ABC Inc. makes uniforms for elementary schools. The company reported the following costs for the current year: Rent $12,000 Advertising $20,000 Wages paid cutters $50,000 Cotton for uniforms $15.500 Thread $5.500 Utilities for Factory $26,000 Supervisor's Salary $40,000 Buttons $10,500 Factory Insurance $15,000 Wages paid to sewers $65,000 Compute the cost of manufacturing overhead for ABC Inc. O $89,000 O $124.500 O $109,000 O $69,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 27E: Alard Manufacturing Company has a billing department staffed by four billing clerks. Each clerk is...

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Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.
Alard Manufacturing Company has a billing department staffed by four billing clerks. Each clerk is paid 32,000 per year and is able to process 8,000 bills. Last year, 27,360 bills were processed by the four agents. Calculate the unused capacity in terms of number of bills. a. 27,360 b. 4,640 c. 8,000 d. 32,000
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