Answer (D) is correct . Direct labor costs are wages paid to labor that can feasibly be specifically identified with the production of finished goods. Because the wages of machine operators are identifiable with the production of finished goods, their $145,000 of salaries are a direct labor cost. However, because the salaries and wages of the factory supervisors and machinery mechanics are not identifiable with the production of finished goods, their $60,000 and $25,000 of salaries are not direct labor costs.
Answer (A) is incorrect because The amount of $230,000 includes the salaries of machinery mechanics and factory supervisors.
Answer (B) is incorrect because The amount of $205,000 includes the salaries of factory supervisors.
Answer (C) is incorrect because The amount of $170,000 includes the salaries of machinery mechanics.
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What is the amount of Bright’s direct labor for the year?
