Question

Crane Company reported total manufacturing costs of $390000, manufacturing overhead totaling $59000, and direct materials totaling $64000. How much is direct labor cost?

Answer 1

$267,000

Step-by-step explanation:

Total manufacturing cost refers to the sum of all expenses incurred by a firm in the production process in a period. Total manufacturing cost is compared with total revenue to determine profitability. The calculation of total manufacturing involves additional direct materials, direct labor, and overhead costs.

Therefore, total manufacturing cost = Direct materials +Direct labor + overhead costs.

For crane company:

$390,000= $59,000 + $ 64,000 + direct labor

= $390,000= $123,000 + direct labor

=Direct labor =$390,000-$123,000

=$267,000