Calico Sweet Shoppe incurred the following costs: $1,200 of ice cream, 55 hours of direct labor...

Calico Sweet Shoppe incurred the following costs: $1,200 of ice cream, 55 hours of direct labor at $8 per hour, $75 for indirect materials, $50 for indirect labor, $225 for product advertising, and $200 of administrative costs. How much are total product costs?

$2,190

$1,865

$1,765

$1,640

Solutions

Expert Solution

Option(C) $1765 is correct.

Particulars	Amount
Ice cream	$ 1,200
Direct Labor	$ 440
Manufacturing OH-
Indirect Material	$ 75
Indirect Labor	$ 50
Product cost	$ 1,765

Total Product Cost = Direct Material + Direct Labor + Total Manufacturing Overhead.

The following costs are excluded from product cost:

Administration OH	$ 200
Selling OH- Ad	$ 225

Rest of the options are incorrect.

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ekkarill92 answered 1 year ago

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