Figure 2-11 Information from the records of the Cain Corporation for August 2011 was as follows:
*variable overhead is $205,000, fixed overhead is $200,000

- Refer to Figure 2-11.The total product cost is
A) $1,179,000
B) $ 969,000
C) $ 615,000
D) $ 764,000

Question

Figure 2-11 Information from the records of the Cain Corporation for August 2011 was as follows:
 *variable overhead is $205,000, fixed overhead is $200,000

- Refer to Figure 2-11.The total product cost is
A) $1,179,000 
B) $ 969,000 
C) $ 615,000 
D) $ 764,000

Quizplus · Accepted Answer

The total product cost can be calculated using the formula:
Total product cost = Direct materials + Direct labor + Manufacturing overhead
Direct materials = $250,000
Direct labor = $300,000
Manufacturing overhead = $205,000 (variable) + $200,000 (fixed) = $405,000
Therefore, Total product cost = $250,000 + $300,000 + $405,000 = $955,000
However, since the question is asking for the "total product cost" and not the "total cost of goods sold", we need to add the "ending work in process" inventory to the total product cost. From the information given, the ending work in process inventory is $14,000.
Total product cost + ending work in process = $955,000 + $14,000 = $969,000
Therefore, the correct answer is option B, $969,000.

Figure 2-11 Information from the Records of the Cain Corporation