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Zhang Manufacturing Company has two departments, machining and finishing. For a given period, the following costs were incurred by the company as a whole:
Zhang Manufacturing Company has two departments, machining and finishing. For a given period, the following costs were incurred by the company as a whole: direct material, $430,000; direct labor, $165,000; and indirect production, $80,000. The grand total was $675,000. The machining department incurred 30% of the direct-material costs, but only 10% of the direct-labor costs. Indirect production costs amounted to $38,000 in the machining department and $42,000 in finishing.. Three products were produced using the following proportions of direct material and direct labor in the two departments. (Click the icon to view the data for the three products.) As is commonplace, indirect production costs incurred by each department were allocated to products in proportion to the direct-labor costs of products within the departments. Read the requirements. Requirement 1. Compute the total costs incurred by the machining department and added by the finishing department. Machining Finishing Direct materials Direct labor Indirect production Total Total Data Table Product Alpha Beta Gamma Total for the machining department Alpha Beta Gamma Total added by finishing department Direct Material 40% 50% 10% 100% 10% 30% 60% 100% Direct Labor 20% 10% 70% 100% 50% 40% 10% 100%
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