Question

Donna Corporation manufactures custom cabinets for kitchens. It uses a normal- costing system with two direct-cost categories-direct materials and direct manu- facturing labor-and one indirect-cost pool, manufacturing overhead costs. It pro- vides the following information for 2017. Budgeted manufacturing overhead costs Budgeted direct manufacturing labor-hours Actual manufacturing overhead costs Actual direct manufacturing labor-hours $960,000 32,000 hours $992,000 31,000 hours Calculate the toral manufacturing costs of the 32 Berndale Drive job using normal cost- ing based on the following information $3,500 Actual direct materials costs Actual direct manufacturing labor Actual direct manufacturing labor rate 160 hours S 20 per hour

Answer 1

Answer: $11,500

Explanation:

Total Manufacturing Cost

= Actual Direct material costs + Actual direct manufacturing labor costs + Applied Manufacturing Overhead

Actual Direct Manufacturing labor cost

= 160 x 20

= $3,200

Applied Manufacturing Overhead rate

= Budgeted Manufacturing Overhead Costs / Budgeted Direct Manufacturing labor hours

= 960,000/ 32,000

= $30 per hour

Assuming manufacturing overhead is based on direct labor hours, the total cost would be;

= 3,500 + 3,200 + (30 * 160)

= $11,500