The Zig-Zag Company manufactures zippers for many clothing manufacturers. Costs for the year were direct materials, $5,000; indirect materials, $1,600; direct labor, $12,000; and indirect labor, $4,000. Additional expenses for the year were factory utilities $3,500; depreciation of factory equipment, $1,300; advertising expense, $900; delivery expense on sales to customers, $1,700; and property taxes on factory buildings, $5,200. Which amount is total manufacturing costs for the year?

Question

Quizplus · Accepted Answer

Total manufacturing costs include all direct and indirect costs related to producing the zippers. This includes direct materials, direct labor, indirect materials, and indirect labor, for a total of $23,600 (($5,000 + $1,600) + ($12,000 + $4,000)). In addition, factory utilities, depreciation of factory equipment, and property taxes on factory buildings are considered manufacturing overhead costs, which add up to $10,000 ($3,500 + $1,300 + $5,200). Therefore, the total manufacturing costs for the year are $33,600 ($23,600 + $10,000). The closest answer choice is D, which is the correct answer.

The Zig-Zag Company Manufactures Zippers for Many Clothing Manufacturers