Figure 6-20 Outrageous Cups Corp. manufactures cups. The company's manufacturing operations and costs applied to products for April were:
Three types of cups were produced in April. The quantities and direct materials costs were:
Casts are produced in the Molding Department. Cups pass through the Molding and Finishing Departments. Mugs pass through all three departments. An operations costing system is used.
Refer to Figure 6-20. What is Outrageous Cups' total cost for Casts in April?

Question

Figure 6-20 Outrageous Cups Corp. manufactures cups. The company's manufacturing operations and costs applied to products for April were:
 Three types of cups were produced in April. The quantities and direct materials costs were:
 Casts are produced in the Molding Department. Cups pass through the Molding and Finishing Departments. Mugs pass through all three departments. An operations costing system is used.
Refer to Figure 6-20. What is Outrageous Cups' total cost for Casts in April?

Quizplus · Accepted Answer

Total costs for Casts in April can be calculated using the formula:
Total Cost = Direct Materials Cost + Manufacturing Overhead Applied
Direct Materials Cost for Casts is given as $10,000.
Manufacturing Overhead Applied for Casts can be calculated as follows:
Molding Department Overhead Applied for Casts = $2,500 (20% of Molding Department Overhead Applied) 
Total Manufacturing Overhead Applied for Casts = $2,500 + $1,250 = $3,750 
Therefore, Total Cost for Casts in April = $10,000 + $3,750 = $13,750. 
Thus, the correct answer is option C.