Question

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $197,000 of raw materials on credit; issued materials to production of $206,000 of which $19,000 were indirect. Minstrel incurred a factory payroll of $150,000, of which $29,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The total manufacturing costs added during the period is:

Answer 1

Answer:

$489,500

Explanation:

The computation of the total manufacturing cost added is shown below:

Particulars                                         Amount

Direct material ($206,000 - $19,000) $187000

Direct labor ($150,000 - $29,000) $121,000

Applied manufacturing overhead ($121000 × 150%) $181,500

Total manufacturing cost added           $489,500

We simply added the direct material, direct labor and applied manufacturing overhead cost so that the total manufacturing cost added could come