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What is the amount of direct materials cost incurred by LP Production:

Cost Amount
Advertising-------------------------- $7,500
Assembly line workers wages--- $33,800
Depreciation-Machinery---------- $2,800
Factory utilities--------------------- $9,120
Machinery repairs & maintenance- $4,400
Front office salaries---------------- $20,560
Raw materials------------------------ $79,800
Production supervisor salaries--- $48,750

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Solution Summary

For each cost, the tutorial indicates if it is a non-product cost, direct material, direct labor, variable overhead or fixed overhead.

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$79,800 <-- see discussion below about why this is the only amount you need.

What is the amount of direct materials cost incurred by LP Production:

Cost Amount
Advertising-------------------------- $7,500

All selling costs are non-product ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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