The following are Acme's production costs for the quarter ended September 30th: Direct materials $ 290,000 Direct labor $ 240,000 Factory overhead $ 39,000 What amount of costs should be traced to specific products in the process?

A) $240,000
B) $464,000
C) $274,000
D) $430,000

As we have to find the cost of a specific product in the process and we know direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object, therefore, we include only those cost that is directly impacting cost of product.

Remember, Factory overhead is an indirect cost.

Costs to specific products in the process= [tex]Direct\ labor+ direct\ material[/tex]

⇒ Costs to specific products in the process= [tex]240000+290000[/tex]

∴ Costs to specific products in the process= [tex]\$ 530000[/tex]

Hence, $530000 is the amount of cost that should be traced to specific products in the process.

The following are Acme's production costs for the quarter ended September 30th: Direct materials $ 290,000 Direct labor $ 240,000 Factory overhead $ 39,000 What amount of costs should be traced to specific products in the process? A) $240,000 B) $464,000 C) $274,000 D) $430,000

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The following are Acme's production costs for the quarter ended September 30th: Direct materials $ 290,000 Direct labor $ 240,000 Factory overhead $ 39,000 What amount of costs should be traced to specific products in the process?

A) $240,000
B) $464,000
C) $274,000
D) $430,000