Josh Donaldson is employed by Bringer of Rain Inc. and is directly involved in preparing and packaging the MLB official baseballs. The basic wage rate is $15 per hour and he is paid time-and-a-half for any work in excess of 40 hours per week. Additionally, Bringer of Rain Inc. provides a fringe benefit package that costs the company $5 for each hour of employee time (regular or overtime). During a recent week, Donaldson worked 49 hours but was idle for 3 hours due to a materials shortage.
Assume that Bringer of Rain Inc. treats all fringe benefits as part of manufacturing overhead. Compute Donaldson’s total wages and fringe benefits for the week and indicate how much of his wages and fringe benefits for the week would be allocated to direct labour and how much would be allocated to manufacturing overhead.
Prepare a schedule of cost of goods manufactured in good form.
The following costs relate to one month’s activity in Nutcracker Company:
Rent on factory building
Maintenance of equipment
Direct material used
Utilities on factory
Work-in-process inventory, beginning
Work-in-process inventory, ending
Finished goods inventory, beginning
Finished goods inventory, ending
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