a company incurred the following costs: Selling and administrative expenses: $45,000; Direct materials: $15,000; income tax expense: $10,000, direct labor: $30,000; factory overhead: $5,000. Total manufacturing costs reported on the schedule of cost of goods manufactured

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Business

Angus

28 February, 08:03

a company incurred the following costs: Selling and administrative expenses: $45,000; Direct materials: $15,000; income tax expense: $10,000, direct labor: $30,000; factory overhead: $5,000. Total manufacturing costs reported on the schedule of cost of goods manufactured

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Stella Herrera · Answer 1

Cost of good manufactured = $50000

Explanation:

Total manufacturing cost is the aggregate amount of cost incurred by a business to produce goods in a reporting period.

Generally accepted accounting principles require that the cost of goods sold shall consist of:

the cost of direct materials

the cost of direct labor

the cost of manufacturing overhead

Expenses that are outside of the manufacturing facilities, such as selling, general and administrative expenses, are not product costs. They are reported as expenses on the income statement in the accounting period in which they occur.

In this exercise:

Cost of goods manufactured:

Direct materials = $15000

Direct Labor=$30000

Factory overhead=$5000

Total = $50000