A project phase includes $183,400 direct labor, $261,850 direct material, and $72,600 subcontract cost. What combined direct cost is posted?
Correct Answer
D) $517,850
Combined direct cost is labor plus material plus subcontract cost.
Why This Is the Correct Answer
Combined direct cost is labor plus material plus subcontract cost.
Why the Other Options Are Wrong
Option A: $445,250
$445,250 is below the supported result for direct cost subtotal; it likely uses the wrong base, period, or account bucket.
Option B: $456,000
$456,000 is below the supported result for direct cost subtotal; it likely uses the wrong base, period, or account bucket.
Option C: $500,250
$500,250 is below the supported result for direct cost subtotal; it likely uses the wrong base, period, or account bucket.
Memory Technique
Direct Cost Subtotal drawer for Job-Cost Report: 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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