6.3.PNG - Exercise 6-32 Basic Product Costing[LO 6-3 In...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Exercise 6-32 Basic Product Costing [LO 6-3) In December Sara's Sodas produced 3.8 million liters of the beverage. Manufacturing overhead was $1,350.000 and the cost per liter was $0.45. Labor costs were 20 percent of materials cost. Required: a. Calculate the materials cost for December. (Enter your answer in dollars not in millions.) $ 300000 b. Calculate the labor cost for December. (Enter your answer in dollars not in millions.) $ 60,000 Explanation: a. If the cost per liter is $0.45 and 3.8 million titers were produced, the total manufacturing cost must have been $1,?10,000 (= $0.45 x 3.8 million). But total manufacturing cost is computed as: Manufacturing cost = Materials + Labor + Manufacturing ouemead $1,710,000 = Materials + 0.20 x Materials + $1.350.000 So, 1.20 X Materials = $1,710,000 — $1,350,000 = $360,000 Materials 2 $300,000 (2 $350,000 :- 1.20) b. Labor = 0 20 x Materials = 0.20 x $300000 = $60,000 ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern