Spa Manufacturing incurred direct materials costs of 450 000

Spa Manufacturing incurred direct materials costs of $450, 000 during the year. Manufacturing overhead applied was $420,000. The predetermined manufacturing overhead rate is 70% f direct costs for the year? labor costs. How much are Spa Manufacturing\' s total manufacturing A) s870,00o B) $1,470,000 C) s1,oso, ooo D) 1,164,00

Solution

B) $1,470,000

Total manufacturing costs = $450,000 + $420,000 + ($420,000/0.70) = $450,000 + $420,000 + $600,000 = $1,470,000