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Snow Inc. is a manufacturing company that specializes in snowmobiles. The following data pertain to the...

Snow Inc. is a manufacturing company that specializes in snowmobiles. The following data pertain to the company from its most recent fiscal year:

Direct materials inventory, beginning $26,000
Work-in-process inventory, beginning $36,000
Direct materials inventory, ending $32,000
Work-in-process inventory, ending $28,000
Purchases of direct materials $76,000
Direct labor $83,000
Insurance on plant $8,500
Maintenance on plant equipment $12,900
Repairs and maintenance - plant $4,000
Marketing expenses $50,000
General and administrative expenses $26,500

What are the total manufacturing costs for this year?

$178,400.
$70,000.
$223,400.
$106,500.

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Solution

Snow Inc

Determination of total manufacturing costs for the year:

Direct materials, beginning inventory             $26,000

Add: Purchases of direct materials                             $76,000

Materials available for production                              $102,000

Less: Direct materials, ending inventory                    ($32,000)

Materials used in Production                                      $70,000

Add: Direct labor                                                        $83,000

Prime cost                                                                   $153,000

Add: Manufacturing overheads:

Insurance on Plant                                         $8,500

Maintenance on Plant equipment                    $12,900

Repairs and maintenance                                $4,000

                                                                                    $25,400

Total Manufacturing costs for the year                       $178,400

ekkarill92 answered 1 year ago
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