Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $...

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Kesterson Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $...

Kesterson Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	7.15
Direct labor	$	4.20
Variable manufacturing overhead	$	1.55
Fixed manufacturing overhead			$	18,900
Sales commissions	$	2.10
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	4,900

If 7,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:

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Answer 1

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Answer #1

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Indirect manufacturing cost = Variable manufacturing overhead + Fixed manufacturing overhead
= (7000 units x $ 1.55) + $ 18900
= 10850 + 18900
= $ 29,750 Answer
Direct material and direct labor = Direct manufacturing cost (not indirect)
Sales expenses and Administrative expense (fixed and variable) are not ‘manufacturing’ cost at all.

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Answer 2

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