Closet Links Clothing Company provided the following manufacturing costs for the month of June. $$\begin{array} {| l | l |}
\hline \text { Direct labor cost } & \$ 138,000 \
\hline \text { Direct materials cost } & 85,000 \
\hline \text { Equipment depreciation } & \
\text { (straight-line) } & 24,000 \
\hline \text { Factory insurance } & 19,000 \
\hline \text { Factory manager's salary } & 11,000 \
\hline \text { Janitor's salary } & 3000 \
\hline \text { Packaging costs } & 19,200 \
\hline \text { Property taxes } & 14,000 \
\hline
\end{array}$$ From the above information,calculate Closet Link's total variable costs.

Question

Closet Links Clothing Company provided the following manufacturing costs for the month of June. $$\begin{array} {| l | l |} 
\hline \text { Direct labor cost } & \$ 138,000 \
\hline \text { Direct materials cost } & 85,000 \
\hline \text { Equipment depreciation } & \
\text { (straight-line) } & 24,000 \
\hline \text { Factory insurance } & 19,000 \
\hline \text { Factory manager's salary } & 11,000 \
\hline \text { Janitor's salary } & 3000 \
\hline \text { Packaging costs } & 19,200 \
\hline \text { Property taxes } & 14,000 \
\hline
\end{array}$$ From the above information,calculate Closet Link's total variable costs.

Quizplus · Accepted Answer

Total variable costs are calculated by adding up the costs of direct materials, direct labor, and variable overhead. From the provided information, we can see that the direct materials cost is $180,000, the direct labor cost is $43,000, and the variable overhead cost is $19,200. Therefore, the total variable costs are $242,200 (which is the sum of these three costs).

Closet Links Clothing Company Provided the Following Manufacturing Costs for the Month