Innovative designs manufacture wooden crates. Following is the cost related to company:
Wood used in crate production
$54,000
Nails (insignificant and variable expense)
$350
Direct labor
$38,000
Plant utilities:
$1,500 each month,
plus $0.40 for each kwh used each month
Annual rent expense
$21,400
Innovative designs use 500 kwh each month.
Total manufacturing cost for the year under variable costing approach is:
a. $94,750
b. $134,150
c. $94,400
d. $92,550