Question

Rustic Living furniture company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include:Wages paid to maintenance workers $60,000Fabric used to upholster furniture 8,000Wages paid to assembly line workers 100,000Lumber used to buildproduct 15,000Sales commissions 7,500Insurance cost for factory 21,000Freight in (raw materials) 3,000Utilities in factory 12,000Factory Supervisor Salary 60,000Depreciation on factory equipment 18,000Utilities in sales office 26,500Costs of delivery to customers8,000Depreciation on sales office1,000Lubricants used in factory equipment 500Direct material costs for Rustic Living totaled(a) $8,000(b) $23,000(c) $15,000(d) $26,000

Answer 1

(d) $26,000

Step-by-step explanation:

The computation of the direct material cost is shown below:

= Fabric used to upholster furniture + Lumber used to build product + Freight in (raw materials)

= $8,000 + $15,000 + $3,000

= $26,000

The other cost which is mentioned in the question is related to direct labor, overhead cost, etc. Thus all other costs should be ignored.