Respuesta :
Answer:
1. please refer to item 1 in explanation table below
2. $477, 400
3. $256, 600
4. $15.91
Explanation:
Loring Company
(1) Classification of costs:
Direct Materials Direct Labor Overhead Selling Expense Admin Expense
Direct materials $210, 000
Factory rent $20, 000
Direct labor $123, 000
Factory utilities $6, 400
Supervision in factory $54, 000
Indirect labor $34, 000
Depreciation of factory equipment $6, 000
Sales commission $26, 000
Sales salaries $66, 000
Advertising $34, 000
Depreciation on headquarter building $9, 600
Salary of corporate receptionist $35, 000
Other administrative costs $186, 000
Salary of factory receptionist $24, 000
(2) Total Product cost is the total cost incurred in the production process. It is a sum of all direct labor costs, direct material costs and factory overhead costs. Factory overhead costs include factory rent, factory utilities, salaries of factory supervisor, indirect labor, indirect materials and depreciation of all equipment and plants used in the factory. These are basically all costs that re directly, and indirectly involved in the production process.
Total Product cost = $210, 000 + $20, 000 + $123, 000 + $6, 400 + $54, 000 + $34, 000 + $34, 000 + $6, 000 + $24, 000 = $477, 400
(3) Total Period cost is any cost that cannot be capitalized into inventory, prepaid expenses or fixed assets. This cost is the cost that is incurred not as a result of production. They are incurred independently of the production process.
Total period costs = $26, 000 + $66, 000 + $34, 000 + $9, 600 + $35, 000 + $186, 000
= $356, 600
(4) Unit cost = $477, 400 / 30, 000 = $15.91
