FINDING PRODUCTION COSTS JEAN SMITH Department 1 Prime Costs are 40% of total manufacturing costs Direct Labor is 25% of factory overhead costs Factory overhead is $ 600,000 Required Find total manufacturing costs Solution Department 2 Direct product costs are materials and labor Conversion costs are 300% of materials Indirect product costs are 50% of conversion costs Total manufacturing costs are $ 600,000 Required Find material costs, prove your answer Solution Department 3 Conversion costs are $ 100.000 Prime costs are $ 100,000 Material purchases are $70,000 Increase in materials inventory is $10,000 Decrease in WIP inventory is $ 20,000 Required Find factory overhead costs Solution