Question

The following are Acme's production costs for the quarter ended September 30th: Direct materials 270,000 Direct labor 220,000 Factory overhead 37,000 What amount of costs should be traced to specific products in the process

Answer 1

Answer:

Direct costs traced to product = $270,000 + $220,000 =  $490,000

Explanation:

Cost that can be traced to specif products are direct costs, both direct material and direct labor cost.

Factory overhead costs are indirect costs that can not be specifically traced back to a product but are associated with the production of a product for an example Water and electricity, Most products need electricity to be produced or Supervision is an example

Answer 2

Answer:

$490000

Explanation:

The factory overhead in the production process is a fixed cost ( indirect fixed cost ) that is been incurred in the process of production and therefore it is not traced but a fixed cost. therefore the amount of costs that should be traced to specific products produced in the produced includes:

direct material costs = $270000

direct labor costs = $220000

The total costs traced to specific products = direct material cost + direct labor cost

= $270000 + $220000 = $490000