Direct Materials and Direct Labor Costs Total $40,000 and Factory

question 16

Multiple Choice

Direct materials and direct labor costs total $40,000 and factory overhead costs total $100 per machine hour.If 200 machine hours were used for Job #202, what is the total manufacturing cost for Job #202?

• A)$95,000
• B)$75,000
• C)$65,000
• D)$60,000
• E)$55,000

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, usually expressed as a percentage of sales revenue.

Net Operating Income

Income generated from regular business operations, excluding deductions for interest and taxes.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including costs related to factory equipment maintenance, factory management salaries, and utilities.

Period Cost

Expenses that are not directly tied to the production process and are charged to the period in which they occur, such as selling and administrative expenses.