Creative crates co produces wooden crates used for shipping, Ask an Expert

Accounting

Creative Crates Co. produces wooden crates used for shipping products by ocean liner. In 2014, Creative incurred the following costs.

Wood used in crate production $55,560
Nails (considered insignificant and a variable expense) $510
Direct labor $40,830

Utilities for the plant: $2,400 each month, plus $0.53 for each kilowatt-hour used each month Rent expense for the plant for the year $22,430 Assume Creative used an average 700 kilowatt-hours each month over the past year.

(a) What is Creative's total manufacturing cost if it uses a variable costing approach?

Total Manufacturing Costs:

(b) What is Creative's total manufacturing cost if it uses an absorption costing approach?

Total Manufacturing Costs:

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9968475

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