A job-cost ledger shows labor cost of $52,500 and material cost of $68,750 for a concrete phase. What combined direct cost is posted?
Correct Answer
A) $121,250
Combined direct cost is labor plus material, or $121,250.
Why This Is the Correct Answer
Combined direct cost is labor plus material, or $121,250.
Why the Other Options Are Wrong
Option B: $116,250
$116,250 is below the supported result for direct cost subtotal; it likely uses the wrong base, period, or account bucket.
Option C: $123,750
$123,750 is above the supported result for direct cost subtotal; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $126,500
$126,500 is above the supported result for direct cost subtotal; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Direct Cost Subtotal drawer for Checking Direct-Cost: label combined before counting dollars.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Cost and Expense Records, Objectives of the Cost System and Cost Allocation; use the job ledger figures in the stem and recompute the same accounting measure.
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