Question

Cupid Co. manufactures dog toys. One of its most popular products, Bacon Ben, has the following costs to produce 1,000 units: $9,600 direct materials, $1,920 advertising costs, $960 plant manager salary, and $640 salaries for factory maintenance. If the cost to produce one Bacon Ben is $14.72, how much is Cupid’s direct labor for this product?

Explain please.

Answer 1

3,520= direct labor

Step-by-step explanation:

Giving the following information:

Bacon Ben, has the following costs to produce 1,000 units:

$9,600 direct materials

$1,920 in advertising costs

$960 plant manager salary

$640 salaries for factory maintenance

To calculate the direct labor cost we need to use the following formula:

Total manufactured cost= direct materials + direct labor + allocated manufacturing overhead

Total manufactured cost= 1,000*14.72= $14,720

Direct material=9,600

Overhead= plant manager salary + salaries for factory maintenance

Overhead= 960 + 640= 1,600

14,720= 9,600 + direct labor + 1,600

3,520= direct labor