Question

Dolan Company's accounting records reflect the following inventories:

Dec. 31, 2020

Dec. 31, 2019

Raw materials inventory

$310,000

$260,000

Work in process inventory

300,000

160,000

Finished goods inventory

190,000

150,000

During 2020, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000, and manufacturing overhead incurred was $640,000.
Dolan Company's total manufacturing costs incurred in 2020 amounted to

2. Management by exception
A. means that only unfavorable differences will be investigated.
B. means that material differences will be investigated.
C. means that all differences will be investigated.
D. causes managers to be buried under voluminous paperwork.

Answer 1

Dolan Company's total manufacturing costs incurred in 2020 equaled $2,060,000, which is the sum of direct materials used ($750,000), direct labor costs ($670,000), and manufacturing overhead ($640,000).

Step-by-step explanation:

To calculate the Dolan Company's total manufacturing costs incurred in 2020, we must add together the direct materials used, direct labor, and manufacturing overhead. First, we calculate the direct materials used. This is done by adding the raw materials inventory at the beginning of the year to the raw materials purchased and then subtracting the raw materials inventory at the end of the year:

• Beginning Raw Materials Inventory: $260,000
• + Raw Materials Purchased: $800,000
• - Ending Raw Materials Inventory: $310,000
• = Direct Materials Used: $750,000

Next, we add the direct materials used to the direct labor costs and the manufacturing overhead to find the total manufacturing costs:

• Direct Materials Used: $750,000
• + Direct Labor Costs: $670,000
• + Manufacturing Overhead: $640,000
• = Total Manufacturing Costs: $2,060,000

Answer 2

Answer and Explanation:

The computation of the total manufacturing cost is shown below:

As we know that

Total manufacturing cost is

= Direct raw material used + direct labor cost + manufacturing overhead cost

= ($260,000 + $800,000 - $310,000) + $670,000 + $640,000

= $2,060,000

2. The management of exception means examining the financial and operational business results and considered the issues that faced by the company by having attention on it. ALso it considered teh differences arise from the expected amount

So here means that non-favorable difference would be investigated or material difference would be investigated