Question

4) Pembroke Corporation has provided the following information (4 pts): Cost per Unit Cost per Period Direct materials $ 5.00 Direct labor $ 2.90 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 21,000 Sales commissions $ 1.00 Variable administrative expense $ 0.55 Fixed selling and administrative expense $ 7,500 If 4,000 units are produced, the total amount of direct manufacturing cost incurred is closest to: A) $31,600 B) $35,600 C) $53,400 D) $36,600

Answer 1

Direct manufacturing cost is a cost that are easily traceable to manufacturing of product you produced .It includes direct material and direct labor .

Direct manufacturing cost per unit =Direct material +Direct labor

                      = 5 +2.9

                      =$7.9

Total direct manufacturing cost = 7.9 *4000 units =$ 31600

Correct option is "A"-31600

Note :

i)Variable overhead and fixed overhead are indirect cost

ii)sales commission ,variable administrative ,fixed selling and administrative cost are period cost which are not related to manufacturing of product .