Minstrel Manufacturing uses a job order costing system.During one month,Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The total manufacturing costs added during the period is:
A)$440,000.
B)$470,000.
C)$500,000.
D)$570,000.
E)$540,000.

Question

Quizplus · Accepted Answer

Total manufacturing costs = Direct materials + Direct labor + Manufacturing overheadDirect materials = $195,000 - $30,000 = $165,000Direct labor = $150,000 - $40,000 = $110,000Manufacturing overhead = $110,000 x 150% = $165,000Total manufacturing costs = $165,000 + $110,000 + $165,000 = $440,000

Minstrel Manufacturing Uses a Job Order Costing System