Question

Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $195,000 of raw materials on credit; issued materials to production of $208,000 of which $17,000 were indirect. Minstrel incurred a factory payroll of $152,000, of which $27,000 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:

$503,500

Explanation:

Total Manufacturing Cost = Direct Material + Direct Labor + Manufacturing Overhead

Direct Material = Total Material - Indirect Material

Direct Material = $208,000 - $17,000

Direct Material = $191,000

Direct Labor = Total Labor - Indirect Labor

Direct Labor = $152,000 - $27,000

Direct Labor = $125,000

Manufacturing Overhead = 150% of Direct Labor Cost

Manufacturing Overhead = $125,000 x 150 / 100

Manufacturing Overhead = $187,500

Total Manufacturing Cost = $191,000 + $125,000 + $187,500

Total Manufacturing Cost = $503,500