Frontenac Company incurred the following costs last year:

Direct materials...............................................................$324,000

Factory rent.......................................................................36,000

Direct labour....................................................................180,000

Factory utilities....................................................................9,450

Supervision in the factory......................................................75,000

Indirect labour in the factory...................................................45,000

Depreciation on factory equipment...........................................13,500

Sales commissions...............................................................40,500

Sales salaries.....................................................................97,500

Advertising.......................................................................55,500

Depreciation on the headquarters building....................................15,000

Salary of the corporate receptionist...........................................45,000

Other administrative costs.....................................................262,500

Salary of the factory receptionist.............................................42,000

Required:

1. Classify each of the costs using the following table format. Be sure to total the amounts in each column.

Example: Direct materials, $324,000.

2. What was the total product cost for last year?
3. What was the total period cost for last year?
4. If 30,000 units were produced last year, what was the unit product cost?
5. Why are certain costs contained in the cost of the product and others are not?

Transcribed Image Text:

Product Cost Period Cost Selling Manufacturing Direct Direct Administrative Expense Materials Labour Overhead Expense Costs Direct materials S324,000