a) The total manufacturing cost is $ 3125
b) The cost per skateboard is $ 25
<em><u>Solution:</u></em>
The company incurred direct materials costs of $1,150 and direct labor costs of $250
Direct material cost = $ 1150
Direct labor cost = $ 250
Overhead is applied using a rate of 150% of direct materials costs
Therefore,
Overhead cost = 150 % of 1150
Total manufacturing cost = Direct material cost + Direct labor cost + overhead cost
Total manufacturing cost = 1150 + 250 + 1725 = 3125
Thus total manufacturing cost is $ 3125
<em><u>b. What is the cost per skateboard?</u></em>
Cost per skateboard = (Total manufacturing cost) ÷ (number of skateboards)
Thus cost per skateboard is $ 25