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15 December, 15:23

Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $150,000 of direct materials costs and $200,000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is 1. $500,000 2. $550,000 3. $450,000 4. $350,000

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  1. 15 December, 15:32
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    3. $450,000

    Explanation:

    The total manufacturing costs fo the Simpson company can be calculated using the following mentioned equation:

    Total manufacturing costs=Direct material cost+Direct labour cost+Manufacturing overheads

    In the given question

    Direct material cost=$150,000

    Direct labour cost=Manufacturing overheads/200%

    =$200,000/200%

    =$100,000

    manufacturing overheads=$200,000

    Total manufacturing costs=$150,000+$100,000+$200,000

    =$450,000

    So based on the above calculations, the answer is 3. $450,000
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