Barbara's fashionable friends always bought the newest, trendiest jeans, and ended up with too many "old" pairs occupying precious closet space. Barbara used her smarts and came up with a cool idea: encourage people to donate their jeans, or sell them to her for a nominal amount, and she would then rework them into snazzy jean jackets. Behold: Snazzy Inc. was born. But while Barbara is blessed with creativity and sewing skills, she needs help organizing and summarizing her business costs. Some transactions that Barbara engaged in this year, in no particular order, are as follows.

1. Purchased a new sewing machine for $2,200, with an estimated life of 5 years, used exclusively for her business.

2. Purchased thread, buttons, and patches for $320all of which were used up this year.

3. Purchased new jeans for $950 and collected donated jeans from friends.

4. Paid friend $1,700 to help cut and sew the jackets together.

5. Finished making many jackets and sold all but one of them, and its total cost is $80.

6. Started the year with several completed jackets waiting to be sold; the combined cost of these was $370.

7. Paid $410 to ship three batches of jackets across the country as part of the sales transaction.

8. Paid $280 to run a series of ads in online channels.

9. Finished making all jackets she started except for one, which is still attached to the sewing machine, half-finished; it has an estimated cost so far of $40.

10. Began the year with no jackets in the partially completed stage.

11. Counted 40 pairs of jeans still waiting to be transformed at year-end; the cost of these is estimated at $120.

12. At the beginning of the year, had just10pairs of jeans sitting on the shelf untouched, with a combined cost of $30.

(b) Create T-accounts for RM Inventory, WIP Inventory, FG Inventory, and COGS. Enter any appropriate beginning balances and record any amounts that would have been debited or credited to these accounts during the year. Lastly, determine ending balances for all four accounts.

	Ending Balances
RM Inventory	$120
WIP Inventory	$40
FG Inventory	$80
COGS	$3,570

(c) What were Barbara's total manufacturing costs this year? What were her prime costs? What were her conversion costs?

Total manufacturing costs $

Prime costs $

Conversion costs $