A company makes bikes from recycled metal. For a recent job lot of 200 bikes, the company incurred direct materials costs of $6,000 and direct labor costs of $2,000. Factory overhead applied to this job is $9,000. What is the total manufacturing cost of this job lot?Multiple Choice$15,000.$17,000.$8,000.$9,000.$11,000.
Question
A company makes bikes from recycled metal. For a recent job lot of 200 bikes, the company incurred direct materials costs of 2,000. Factory overhead applied to this job is 15,000.8,000.11,000.
Solution
The total manufacturing cost of the job lot is calculated by adding together the direct materials costs, direct labor costs, and factory overhead costs.
Here's how you do it:
- Direct materials costs: $6,000
- Direct labor costs: $2,000
- Factory overhead costs: $9,000
Add these three amounts together:
2,000 (direct labor) + 17,000
So, the total manufacturing cost of the job lot is $17,000.
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