During the year, direct labor costs of $30,000 were incurred, manufacturing overhead totaled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. Champagne sold 25,000 units of product during the year at a sales price of $5.00 per unit. What were the total manufacturing costs for the year assuming $2 comma 080 of indirect materials were used during the period?

Using the models for total manufacturing cost that includes just direct labour costs, direct materials cost and overhead costs, total manufacturing cost = $99,000

Using the model that includes selling and administrative costs & indirect materials cost, total manufacturing cost = $123,080

Explanation:

Total manufacturing cost is a sum of the amount of cost incurred by a business to produce goods in a reporting period.

It usually consists of direct labour costs, direct materials cost and overhead costs.

In some models, the selling and administrative costs & cost of indirect materials are included.

Direct labour cost = $30,000

Manufacturing overhead costs = $42,000

Direct materials cost = $27,000

Total manufacturing cost = 30000 + 42000 + 27000 = $99,000

Selling and Administrative costs = $22,000

Indirect materials cost = $2,080

Total materials cost including selling and administrative costs & indirect materials cost = 99000 + 22000 + 2080 = $123,080

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