Stephenson Company's computer system recently crashed,erasing much of the Company's financial data.The following accounting information was discovered soon afterwards on the CFO's backup computer disk.
Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end.What should be the amount of total manufacturing cost?
A)$138,500.
B)$131,000.
C)$142,500.
D)$121,000. $131,000 = $8,500 Direct Materials + $73,500 Direct Labor + $49,000 Overhead Where $73,500 = 1.5($49,000)

Question

Stephenson Company's computer system recently crashed,erasing much of the Company's financial data.The following accounting information was discovered soon afterwards on the CFO's backup computer disk. 
Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end.What should be the amount of total manufacturing cost?
A)$138,500. 
B)$131,000. 
C)$142,500. 
D)$121,000. $131,000 = $8,500 Direct Materials + $73,500 Direct Labor + $49,000 Overhead Where $73,500 = 1.5($49,000)

Quizplus · Accepted Answer

Using the given information, we can calculate that the direct labor cost is 1.5 times the factory overhead, which means the total overhead is $49,000 and the total direct labor cost is $73,500 (1.5 * $49,000). Adding the direct materials cost of $8,500 to the direct labor cost and overhead gives us a total manufacturing cost of $131,000 (=$8,500 + $73,500 + $49,000). Therefore, the correct answer is B.

Stephenson Company's Computer System Recently Crashed,erasing Much of the Company's