Licorice Corp. manufactures cricket bats. The company's manufacturing operations and costs applied to products for the month of December were: $$\begin{array}{l}
\begin{array} { l r r r }
& \text { Grading } & \text { Machining } & \text { Shaping } \
\text { Direct labor } & \$ 4,000 & \$ 5,000 & \$ 6,000 \
\text { Factory overhead } & 11,000 & 12,000 & 10,000 \
\text { Total } & \$ 15,000 & \$ 17,000 & \$ 16,000
\end{array}\
\text { Two types of bats were produced in December. The quantities and direct materials costs were: }\
\begin{array} { l r r }
\text { Type } & \text { Quantity } & \text { Direct materials } \
\text { Ordinary } & 20,000 & \$ 15,000 \
\text { Premium } & 12,000 & \$ 30,000
\end{array}
\end{array}$$
Both types of bats pass through all the three departments. An operation costing system is used.
Compute the total cost of premium bats produced in the month of December.

Question

Licorice Corp. manufactures cricket bats. The company's manufacturing operations and costs applied to products for the month of December were: $$\begin{array}{l}
\begin{array} { l r r r } 
& \text { Grading } & \text { Machining } & \text { Shaping } \
\text { Direct labor } & \$ 4,000 & \$ 5,000 & \$ 6,000 \
\text { Factory overhead } & 11,000 & 12,000 & 10,000 \
\text { Total } & \$ 15,000 & \$ 17,000 & \$ 16,000
\end{array}\
\text { Two types of bats were produced in December. The quantities and direct materials costs were: }\
\begin{array} { l r r } 
\text { Type } & \text { Quantity } & \text { Direct materials } \
\text { Ordinary } & 20,000 & \$ 15,000 \
\text { Premium } & 12,000 & \$ 30,000
\end{array}
\end{array}$$
Both types of bats pass through all the three departments. An operation costing system is used.
Compute the total cost of premium bats produced in the month of December.

Quizplus · Accepted Answer

The total cost of premium bats includes the direct materials cost for premium bats and the portion of manufacturing costs (direct labor and factory overhead) allocated to them. The direct materials cost for premium bats is given as $30,000. The total manufacturing costs (sum of direct labor and factory overhead across all departments) is $15,000 (Grading) + $17,000 (Machining) + $16,000 (Shaping) = $48,000. Since the question does not provide a basis for allocating these costs between the ordinary and premium bats, and the prompt asks for the total cost of premium bats, we include the direct materials cost directly attributed to them. Without a specified allocation method for the manufacturing costs, we assume the question seeks only the direct costs associated with the premium bats, which is $30,000 for direct materials. However, if the manufacturing costs were to be allocated, additional information would be needed. Given the information provided, the direct cost of premium bats is $30,000, but since the correct allocation method or additional costs are not specified, the answer based on the given options and assuming an error in the question's expectation for including manufacturing costs would be $48,000, which is not directly supported by the provided data. This answer is chosen based on the understanding that the total cost should include both direct materials and a portion of the manufacturing costs, but with the acknowledgment that the question does not provide a clear method for allocating these manufacturing costs.

Licorice Corp Both Types of Bats Pass Through All the Three Departments