Question

Question 1 - A partial listing of costs incurred at the Booth, Inc. during November appears below

	Per unit cost		Cost per month
Direct materials	$1.16
Direct labor	$3.35
Indirect materials	$0.21
Indirect labor	$1.92
Depreciation, factory			$5,700
Factory supervisor’s salary			$82,000
Sales commissions	$0.80
Administrative salaries			$101,250
Advertising			$39,100
Depreciation of administrative equipment			$2,300

a. For financial reporting purposes, calculate the total amount of product costs incurred to produce and sell 8,000 units? Show your work.

b. For financial reporting purposes, calculate the total amount of period costs incurred to produce and sell 8,000 units? Show your work.

Answer 1

• Product Cost include:
  Direct production cost and Indirect manufacturing (factory) overheads

[a]

Direct material	$9,280
Direct Labor	$26,800
Indirect material	$1,680
Indirect labor	$15,360
Depreciation - Factory	$5,700
Factpry Supervision's salary	$82,000
Total Product cost for 8000 units	$140,820

• Period Cost includes:
  Indirect and non manufacturing cost related to sales and administration.

Sales Commission	$6,400
Administrative salaries	$101,250
Advertising	$39,100
Depreciation - Administrative equipment	$2,300
Total Period cost for 8000 units	$149,050