Question

Acme, Inc., incurs the following costs during May: Sales expense $ 13,000 Administrative expense $ 23,000 Direct labor 27,500 Plant depreciation 7,700 Factory supplies 4,000 Indirect labor 9,500 Advertising 4,300 Utilities 11,500 , Raw material used 19,500 , 75% of this amount relates to the factory. Calculate Acme’s total manufacturing costs for May.

Answer 1

Answer:

The Acme’s total manufacturing costs for May is $76,825

Explanation:

The calculation of total manufacturing cost is computed below:

= Raw material used + Direct labor + Plant depreciation + Factory supplies + Indirect labor + Utilities

= $19,500 + $27,500 + $7,700 + $4,000 + $9,500 + $11,500 × 75%

=  $19,500 + $27,500 + $7,700 + $4,000 + $9,500 + $8,625

= $76,825

The other cost like sales expense, administrative expense, advertising is not a part of manufacturing cost. Thus, it is not considered in the calculation part.

Hence, the Acme’s total manufacturing costs for May is $76,825