Question

II. Corriendo Company manufactures running shoes. For next year, Corriendo plans on producing 20,000 pairs of...

II. Corriendo Company manufactures running shoes. For next year, Corriendo plans on producing 20,000 pairs of its most popular line and is budgeting the following costs:

Direct materials $225,000
Direct labor 135,000
Overhead 240,000

Required:

Round your answers to two decimal places.

1. Calculate the prime cost per pair of shoes: $

2. Calculate the conversion cost per pair of shoes: $

3. Calculate the total manufacturing cost per pair of shoes: $

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Answer #1

1.

Direct materials $225,000
(+) Direct labor $135,000
Prime cost $360,000
( / ) Budgeted number of pairs of shoes 20,000
Prime cost per pair of shoes $18

2.

Direct labor $135,000
(+) Overhead $240,000
Conversion cost $375,000
( / ) Budgeted number of pairs of shoes 20,000
Conversion cost per pair of shoes $18.75

3.

Direct materials $225,000
(+) Direct labor $135,000
(+) Overhead $240,000
Total manufacturing cost $600,000
( / ) Budgeted number of pairs of shoes 20,000
Manufacturing cost per pair of shoes $30
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