Using the following data for Caro Corporation how much were the total manufactur

Question

Using the following data for Caro Corporation how much were the total manufacturing costs for the year? Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process $237,000 Actual manufacturing overhead costs $745,000 $120,800 $362,000 S63,000 S98,200 $241,100 Inventories Raw materials Work in process Finished goods Beginning of YearEnd of Year $8,000 S15,000 S35,000 S9,000 $23,000 $38,000 O $728,800 O $720,800 O $719,800 $724,900

Explanation / Answer

Manufacturing cost = Direct material + Direct labour + Manufacturing Overhead

Direct material = Opening Stock + Purchases - Closing stock

= 9,000 + 362,000 - 8,000

= 363,000

Direct labour = 120,800 (given)

Manufacturing overhead = 241,100 (i.e. actual overhead cost)

Therefore manufacturing cost = 363,000 + 120,800 + 241,100

= 724,900 (Option 4)

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