) Presley Products Inc. is a manufacturer of limited edition dolls. They use ope
ID: 2374577 • Letter: #
Question
) Presley Products Inc. is a manufacturer of limited edition dolls. They use operations costing to measure and track the costs incurred for specific product lines. While most of the products do require some machine time, Presley has determined that direct labor hours drive its manufacturing overhead costs. During the month of April, the following data were available for a particular line of dolls: Direct labor 3,000 hours at $10 per hour Direct materials 4,000 pounds at $2 per pound If total overhead costs during the month totaled $25,000 when a total of 50,000 direct labor hours were worked, what will be the total manufacturing cost for this line of dolls? a. $44,000 b. $39,500 c. $63,000 d. $40,500Explanation / Answer
Presley Products Inc. is a manufacturer of limited edition dolls. They use operations costing to measure and track the costs incurred for specific product lines. While most of the products do require some machine time, Presley has determined that direct labor hours drive its manufacturing overhead costs. During the month of April, the following data were available for a particular line of dolls: Direct labor 3,000 hours at $10 per hour Direct materials 4,000 pounds at $2 per pound If total overhead costs during the month totaled $25,000 when a total of 50,000 direct labor hours were worked, what will be the total manufacturing cost for this line of dolls? ============================================================================================================================================================================================= a. $44,000 ============================================================================================================================================================================================= b. $39,500 ----correct answer =============================================================================================================================================================================================c. $63,000 ============================================================================================================================================================================================= d. $40,500 ============================================================================================================================================================================================= Direct labour 3000 x10 =30 000 ============================================================================================================================================================================================= material costs =8 000 ============================================================================================================================================================================================= Total =38 000 ============================================================================================================================================================================================= schedule -50,000 hours ============================================================================================================================================================================================= Overhead- ($25,000) ============================================================================================================================================================================================= hourly cost=$25,000/50,000 = $0.50.. ============================================================================================================================== overhead is 50 cents per hour. Since charged 3,000 hours, overhead is $0.50*3,000 = $1,500. Add it other costs ($38,000) and gives $39,500. =============================================================================================================================================================================================
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