Question

Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $100,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is _______.

Answer 1

The total manufacturing costs for Job No. 176 is $3000,000.

Explanation:

The cost that are associated with the process of manufacturing a product refers to the manufacturing cost. It includes the cost of all resources that are used in the production process. There are three categories under which this manufacturing cost gets divided. It includes, direct material cost., direct cost and  manufacturing overhead cost.

In the example given:

Direct material cost = $100,000

Manufacturing overhead = $120,000

It has been stated that the 1505 of direct labor cost is applied to the overhead.

Thus; 120,000\150% = 80,000

Manufacturing cost = Manufacturing overhead + Direct Labor cost + Direct material cost

= 120,000 + 80,000 + $100,000=

=  $3000,000.