Question

Skolnick Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.40 Direct labor $ 3.60 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 112,000 Sales commissions $ 1.50 Variable administrative expense $ 0.50 Fixed selling and administrative expense $ 32,200 Required: a. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred? (Do not round intermediate calculations.) b. If 7,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

Answer 1

Direct cost= $63,000

Indirect cost= $123,900

Step-by-step explanation:

Giving the following information:

Direct materials $ 5.40

Direct labor $ 3.60

Variable manufacturing overhead $1.70

Fixed manufacturing overhead $112,000

The overhead component of production is an indirect cost.

Direct cost= (5.4 + 3.6)*7,000= $63,000

Indirect cost= (1.7*7,000) + 112,000= $123,900