The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:
Direct material$2,100,000 Advertising expense 99,000 Depreciation on factory building 115,000 Direct labor: wages 485,000 Cost of finished goods inventory at year-end 115,000 Indirect labor: wages 140,000 Production supervisor’s salary 45,000 Service department costs* 100,000 Direct labor: fringe benefits 95,000 Indirect labor: fringe benefits 30,000 Fringe benefits for production supervisor 9,000 Total overtime premiums paid 55,000 Cost of idle time: production employees§ 40,000 Administrative costs 150,000 Rental of office space for sales personnel† 15,000 Sales commissions 5,000 Product promotion costs 10,000
*All services are provided to manufacturing departments.
§Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
1. Compute each of the following costs for the year just ended: