QUESTION 2

( a ) Prime Cost
DIRECT MATERIALS RM
Beginning direct material 12,000
(+) Direct materials purchase 106,000
(-) Ending direct materials (19,000)
TOTAL 99,000

PRIME COST RM
Direct materials 99,000
Direct labour 70,000
TOTAL 169,000

( b ) Manufacturing Overhead Cost

MANUFACTURING OVERHEAD COST RM
Factory supervisor salaries 12,000
Factory depreciation expenses 8,000
Ultilities expenses (60% x 100000) 6,000
Indirect labour 21,000
Property taxes on the factory 7,550
Factory supplies used 2,575
Machine maintenances expenses 1,773
TOTAL 58,898
( c ) Conversion Cost
CONVERSION COST RM
Direct labour 70,000
Manufacturing overhead 58,898
TOTAL 128,898

( d ) Manufacturing Cost
MANUFACTURING COST RM
Direct materials 99,000
Direct labour 70,000
Manufacturing overhead cost 58,898
TOTAL 227,898

( e ) Non – Manufacturing Cost

NON – MANUFACTURING COST RM
Saleperson salaries expenses 14,000
Ultilities expenses (40% x 100000) 4,000
Office rental expenses 9,000
Administration salaries expenses 35,000
Freight out 500
Advertising expenses 3,500
Commission cost 6,050
Sales discount 2,000
TOTAL 74,050