Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month. Depreciation on factory equipment Depreciation on CEO's company car Speakers used in the keyboard Production supervisor's salary Glue and screws used in the keyboards Wages of persons who install the speakers Cost to run an ad on local radio stations Utilities for the factory Personnel manager's salary Wages of person who attaches legs to keyboards $800 100 1,100 2,800 370 3,000 600 1,200 2,500 1,950 1. Calculate the total product cost for Noteworthy.
2. Calculate the prime cost for Noteworthy.
3. Calculate the manufacturing overhead for Noteworthy.
4. Calculate the direct labor for Noteworthy.
5. Calculate the conversion cost for Noteworthy.
6. Calculate the total variable cost (with number of units produced as the activity) for Noteworthy.
7. Calculate the total fixed cost (with number of units produced as the activity) for Noteworthy.

Noteworthy, Inc.

1. The total product cost for Noteworthy = $11,220

2. The prime cost for Noteworthy = $6,050

3. The manufacturing overhead for Noteworthy = $5,170

4. The direct labor for Noteworthy = $4,950

5. The conversion cost for Noteworthy = $10,120 ($4,950 + $5,170)

6. The total variable cost (with number of units produced as the activity) for Noteworthy = $8,220

7. The total fixed cost (with number of units produced as the activity) for Noteworthy = $6,200

Explanation:

a) Data and Calculations:

Manufacturing Costs:

Direct

Speakers used in the keyboard                               $1,100

Wages of persons who install the speakers           3,000 )

Wages of person who attaches legs to keyboards 1,950 ) $4,950

Total direct or prime costs =                                  $6,050

Indirect

Depreciation on factory equipment               $800

Utilities for the factory                                    1,200

Production supervisor's salary                     2,800

Glue and screws used in the keyboards        370

Total indirect or manufacturing overhead $5,170 $5,170

Total product cost for Noteworthy =                    $11,220

Administrative and Selling Costs:

Depreciation on CEO's company car          $100

Personnel manager's salary                      2,500

Cost to run an ad on local radio stations    600

Total administrative and selling costs = $3,200

Variable Costs:

Prime costs of materials and labor      $6,050

Utilities for the factory                             1,200

Glue and screws used in the keyboards  370

Cost to run an ad on local radio stations 600

Total variable costs =                           $8,220

Fixed Costs:

Depreciation on factory equipment              $800

Production supervisor's salary                     2,800

Depreciation on CEO's company car              100

Personnel manager's salary                        2,500

Total fixed costs                                         $6,200