Question

Pinnacle Inc. manufactures curtains to client specifications. It has two cost categories that are directly traced to its products: materials and labor. It also has estimated overhead that consists of: annual manufacturing supervisor's salary of $104,608 annual manufacturing plant cleaning costs of $150,186 annual manufacturing plant utilities of $144,515 Pinnacle is trying to calculate the cost of making Job

Answer 1

Hi, there is missing amounts of Direct Materials and Direct Labor Cost that are important to this question.

However, see the principle explained as below :

Cost of Making the Job include the Direct Costs (traced directly to the product) and Indirect costs (not traced directly to the product).

Thus Pinnacle MUST add together the Direct Costs and Indirect Costs as follows :

Direct Costs

Direct Materials $ (cost not available)

Direct Labor $ (cost not available)

Indirect / Overhead Costs

Supervisor's salary $104,608

Manufacturing plant cleaning costs $150,186

Manufacturing plant utilities of $144,515

Total Manufacturing Cost $ (insufficient information to calculate)