A farm grows figs, raspberries, and lavender.
Question # 00512239
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Updated on: 04/15/2017 06:19 AM Due on: 04/15/2017
A farm grows figs, raspberries, and lavender. The farm manager has never measured the actual labor and materials required for growing, harvesting, and packaging each of these items. Last year, the farm costs were as follows:
Direct labor: $6,000
Direct materials: $3,000
Indirect costs: $9,000
Total $18,000
As you begin to measure the actual production costs, you find that figs require $1,000 in direct labor and $500 in direct materials. Using the traditional cost accounting method to allocate indirect costs based on the percentage of direct labor (i.e. 1/6 of $9,000), how much in direct labor, direct materials, and indirect costs will be allocated to each pound of the 3,000 pounds of figs produced?
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Rating:
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Solution: A farm grows figs, raspberries, and lavender.