Question

Required information [The following information applies to the questions displayed below.) The following data is provided for Garcon Company and Pepper Company. Beginning finished goods inventory Beginning work in process inventory Beginning raw materials inventory (direct materials) Rental cost on factory equipment Direct labor Ending finished goods inventory Ending work in process inventory Ending raw materials inventory Factory utilities Factory supplies used (indirect materials) General and administrative expenses Indirect labor Repairs-Factory equipment Raw materials purchases Selling expenses Sales Cash Factory equipment, net Accounts receivable, net Garcon Company $ 12,000 14, 500 7, 250 27,000 19,000 17, 650 22, 000 5, 300 9,000 8, 200 21,000 1, 250 4, 780 33, 000 50,000 195, 030 20,000 212,500 13, 200 Pepper Company $ 16, 450 19,950 9,000 22, 750 35,000 13, 300 16,000 7,200 12, 000 3, 200 43,000 7, 660 1,500 52, 000 46,000 290, 010 15, 700 115, 825 19, 450 Required: 1. Compute the total prime costs for both Garcon Company and Pepper Company. 2. Compute the total conversion costs for both Garcon Company and Pepper Company.

Answer 1

Solution

	Garcon Company	Pepper Company
Direct Material
Beginning raw material Inventory	$       7,250.00	$          9,000.00
Add: Raw material Purchases	$     24,800.00	$        48,800.00
Raw material Available for use	$     32,050.00	$        57,800.00
Less: Ending Raw material Inventory	$       5,300.00	$          7,200.00
Material Used in Production	$     26,750.00	$        50,600.00
Direct labor	$     19,000.00	$        35,000.00
Total Prime cost	$     45,750.00	$        85,600.00

.

	Garcon Company	Pepper Company
Direct labor	$     19,000.00	$        35,000.00
Manufacturing Overheads
Rental cost of Factory Equipment	$     27,000.00	$        22,750.00
Factory Utilities	$       9,000.00	$        12,000.00
Factory Supplies Used	$       8,200.00	$          3,200.00
Indirect Labor	$       1,250.00	$          7,660.00
Repairs-Factory Equipment	$       4,780.00	$          1,500.00
Total Factory Overheads	$     50,230.00	$        47,110.00
Total Conversion Costs	$ 69,230.00	$ 82,110.00