Tierney Construction,Inc.recently lost a portion of its financial records in an office theft.The following accounting information remained in the office files:
Direct labor cost incurred during the period amounted to 2.5 times the factory overhead.The CFO of Tierney Construction,Inc.has asked you to recalculate the following accounts and to report to him by the end of tomorrow.
What should be the amount of total manufacturing cost?
A)$83,000.
B)$94,000.
C)$108,000.
D)$75,000. = $94,000 = $24,000 Direct Materials Used + $50,000 Direct Labor + $20,000 Overhead = $94,000 Total Manufacturing Cost Where Direct Labor = 2.5($20,000)= $50,000

Question

Tierney Construction,Inc.recently lost a portion of its financial records in an office theft.The following accounting information remained in the office files: 
Direct labor cost incurred during the period amounted to 2.5 times the factory overhead.The CFO of Tierney Construction,Inc.has asked you to recalculate the following accounts and to report to him by the end of tomorrow.
What should be the amount of total manufacturing cost?
A)$83,000. 
B)$94,000. 
C)$108,000. 
D)$75,000. = $94,000 = $24,000 Direct Materials Used + $50,000 Direct Labor + $20,000 Overhead = $94,000 Total Manufacturing Cost Where Direct Labor = 2.5($20,000)= $50,000

Quizplus · Accepted Answer

Using the given information, we can calculate the total manufacturing cost as follows:
Direct Labor = 2.5 x Factory Overhead
Factory Overhead = Direct Labor / 2.5
Total Manufacturing Cost = Direct Materials Used + Direct Labor + Factory Overhead
Substituting the values:
Factory Overhead = 50,000 / 2.5 = 20,000
Total Manufacturing Cost = 24,000 + 50,000 + 20,000 = 94,000
Therefore, option B is the correct answer.