Problem -
Assume the manufacturer of upholstered furniture incurs the following cost:
Carpenter's and lathe operators' wages ............................................................ $460,000
Quality control inspectors' wages........................................................................180,000
Office depreciation ..........................................................................................170,000
Advertising .......................................................................................................35,000
Fabric placed into production .............................................................................520,000
Wood placed into production ...............................................................................310,000
Miscellaneous factory supplies .................................................................................7,000
Factory taxes and insurances ...............................................................................80,000
Upholsterer's wages ..........................................................................................200,000
Factory Manager's salaries .................................................................................80,000
Rent for sales in showroom ..................................................................................18,000
Sales salaries and commissions ...........................................................................120,000
Factory depreciation ..........................................................................................250,000
Require:
a. Calculate the total of direct materials cost incurred during period.
b. Calculate the total of direct labor cost insecure during period.