Question Six (6 marks)

Clarkes manufactures school shoes and incurs the following costs as part of its operations for the period ending 30 June 2021

Costs	$
Factory Supervisor salary	80,000
Purchase of leather and other materials	400,000
Depreciation of factory machinery	120,000
Wages for factory machine operators	180,000
Television Advertising Back to school campaigns	50,000
Wages for workers on the factory assembly line	250,000
Rent for factory premises	70,000
Repair and Maintenance costs- factory machinery	20,000
Administration staff wages	100,000
Commission to sales staff	55,000

(a) Calculate the prime costs. Show all workings including details of what costs have been included. (1 mark)

(b) Calculate the total manufacturing overhead costs. Show all workings including details of what costs have been included. (1 mark)

(c) Calculate the total product costs. Show all workings including details of what costs have been included. (2 marks )

(d) Explain two (2) key reasons why it is important that entities understand their manufacturing costs. (2 marks)