Cost Identification and Analysis, Cost Assignment, Income Statement

Labels and Amount Descriptions

Instructions

presses as needed $($part$-$time workers are easy to hire$).$ She must pay $$10$ per hour. Each worker can produce $20$ copies of the magazine per printing hour or $100$ copies of the brochure.

Distribution costs are $$500$ per month. Melissa will receive a salary of $$1,500$ per month. She is responsible for personnel, accounting, sales, and production$-$in effect, she is responsible for administering all aspects of the business.

Required:

What are the total monthly manufacturing costs?

What are the total monthly prime costs? What are the total monthly prime costs for the regional magazine? For the brochure?

What are the total monthly conversion costs? Suppose Melissa wants to determine monthly conversion costs for each product. Assign monthly conversion costs to each product using direct tracing and driver tracing whenever possible. For those costs that cannot be assigned using a tracing approach, you may assign them using direct labor hours.

Melissa receives $$1\mathrm{.}80$ per copy of the magazine and $$0\mathrm{.}45$ per brochure. Prepare an income statement for the first month of operations.